While Banxico is likely to emphasise its independence from politics, increased financial-market volatility could prompt Banxico to take a more cautious approach towards cutting rates, by avoiding rate cuts larger than 25 bps or even pausing between meetings. 

Election noise in Mexico is likely to pick up after Q1, and a potential landslide victory by Morena, especially if the party takes a super-majority in either chamber of Congress, could give rise to market concerns about increased antibusiness policies. 

Meanwhile, the rising likelihood of a Trump victory in the US election in November could spark Mexican Peso weakness as well as a weaker growth outlook for Mexico, complicating Banxico’s easing cycle.