Mexico inflation accelerates in early July

MEXICO CITY, July 22 (Reuters) - Mexico's annual inflation
rate accelerated more than expected in the first half of July
but not enough to change bets on the timing of interest rate
hikes next year.

Consumer prices rose 3.53 percent in the year through July
15, the country's statistics agency said on Friday.

That was higher than the 3.43 percent forecast of analysts
polled by Reuters and the 3.19 percent reading clocked in early
June.

The data keeps pressure off the country's central bank to
raise interest rates any time soon.

Mexico, whose economy is closely tied to that of the United
States, has been the laggard of Latin America in rebounding
from recession. Brazil, Chile and Peru have all hiked rates to
cool their faster-growing economies.

In Mexico, however, yields in the market for interest rate
swaps suggest investors are betting the central bank will wait
until April or May to hike rates BOMWATCH2. Those yields were
largely unchanged following Friday's data.

Inflation remains close to the central bank's 3 percent
inflation target. Policymakers say they can live with
variations of up to a percentage point higher or lower.

Prices climbed 0.32 percent in the two-week period
MXCPIF=ECI, faster than the 0.24 percent reading expected in
a Reuters poll. The index fell 0.05 percent in the first half
of June.

The annual core inflation rate, which strips out some
volatile food and energy prices, was 3.17 percent, unchanged
from its reading during the first two weeks of June.

Core prices MXCPIH=ECI rose 0.14 percent in the first
half of July. Analysts expected core prices to rise 0.17
percent after rising 0.04 percent in the first half of June.

Source: www.reuters.com