Policy decision: Banxico to meet and hold

In Mexico the focus of the market will be on Thursday's Banxico meeting. A stable inflation outlook, the moderate pace of economic activity ,and restrained FX pass-through, coupled with the delay in Fed's hiking cycle should keep Banxico on hold. As such, consensus anticipate no change in the overnight rate. However, a slightly dovish tone is expected, as the macroeconomic environment suggests downside risks to growth. 

"Given our expectations for the policy decision we keep recommending holding duration risk in local assets.", says Barclays.

The week is light on data, with the Economic Activity Index the main release. 

"We forecast an expansion of 0.1% m/m (1.8%y/y vs consensus 2.28%y/y)", added Barclays.