Mexico spared the worst, but growth will still be weak

Mexico got off lightly from the tariffs announced by President Trump yesterday and the overall hit to the economy from US trade measures may be a bit smaller than we’d initially thought. Even so, we think growth will be very modest this year, perhaps just above zero. Downside risks to the peso have eased and we now think Banxico will deliver more monetary easing in the coming months than we’d previously assumed. We’ve revised down our year-end interest rate forecast to 7.50% (from 8.25%).