Aurelia Butler

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Annual headline inflation in Latin America’s second-largest economy hit 4.90% the first 15 days of January, statistics agency INEGI said, up from the 4.66% in December and above the forecasts of 4.78% in a Reuters poll of economists.Jason Tuvey, Deputy Chief Emerging Markets Economist, said the jump in Mexico’s inflation to a higher-than-expected 4.9% was entirely due to a particularly sharp rise in agricultural goods inflation.He added “it probably means the chances of Banxico starting an easing cycle at February’s Board meeting are now no better than 50-50.”Pantheon Macroeconomics’ chief economist for Latin America, Andres Abadia, said “the key driver of this year’s sharp January increase was perishable-food prices, due to bad weather conditions; a modest increase in energy prices prevented a bigger increase.” Accelerating inflation in November and December led to more careful forecasts at the Bank of Mexico, which has till now held back from reducing Mexico’s key interest rate from its current all-time high.The closely monitored core index, seen as a better gauge of price trends because it strips out volatile energy and food prices, continued to ease and rose 0.25% during the month, while annual core inflation came in at 4.78% in early January, its lowest since August 2021.Pantheon Macroeconomics’ chief economist for Latin America Abadia also added “inflation will continue to fall gradually this year, particularly over H2, but risks remain tilted to the upside, due mostly to bad weather conditions.” A recent Citibanamex survey of economists revealed that a significant portion of the market predicts the Bank of Mexico will commence lowering the key interest rate at its March meeting. More

LONDON/WASHINGTON (Reuters) – The aviation industry will press regulators this week for urgent action to help tackle GPS “spoofing” amid a surge in such activity, which can send commercial airliners off-course, due to conflicts in Ukraine and the Middle East.International trade body IATA and European regulator EASA have organised a meeting in Cologne, Germany, on Thursday that will bring together airlines, plane manufacturers and aviation technology firms, as well as national and regional regulatory bodies, to discuss the issue. Spoofing might involve one country’s military sending false Global Positioning System (GPS) signals to an enemy plane or drone to hinder its ability to function. The problem for commercial aviation comes if that false signal is then picked up by a GPS receiver in a passenger plane, potentially confusing the pilot and air traffic control.And there are signs that’s becoming more common. In December, aviation advisory body OPSGROUP flagged a surge in GPS spoofing affecting private and commercial jets around the Middle East, including Iraq, Iran and Israel, and the Black Sea. AirBaltic, which flies out of Eastern Europe’s Baltic region, has also reported an increase in spoofing, as well as jamming of signals. While technology exists to mitigate such activity, it is mostly confined to military users or those who can afford to buy it privately, like business jet owners. Certifying new technologies for civil aircraft can take up to a decade, industry officials said. But with spoofing increasing, many told Reuters there is no time to wait. “The big challenge you always have with commercial airliners is the certification time,” said Xavier Orr, CEO of Advanced Navigation, which makes anti-spoofing technology.Export controls can be another block to making technologies available for passenger jets, defence firm Honeywell (NASDAQ:HON), which designs avionics solutions to jamming and spoofing, said. According to an agenda for Thursday’s meeting, both short-term and long-term solutions will be discussed, including what technologies exist and can be applied today. The difficulty will be coming up with a coordinated approach that is acceptable to regulators and also cost-effective for airlines. “Ultimately, stakeholders need to come together and agree on a standard,” said Matthias Schaefer, the managing director of SeRo Systems GmbH, another maker of anti-spoofing tech.IATA, the International Air Transport Association, said the meeting would focus on developing guidance for risk mitigation. The EU Aviation Safety Agency (EASA) confirmed the event was taking place, but did not respond to requests for a guest list or further details on the agenda. “The FAA (U.S. Federal Aviation Authority) is working with interagency and international partners on global navigation satellite system (GNSS) authentication capabilities and GNSS disruption identification, location and mitigation tools,” the FAA said in an emailed statement. A spokesperson for the NATO military alliance said it would not send a representative. AIRLINES Air France will be among airlines attending the meeting to raise its concerns and connect with those designing anti-spoofing technologies.”Air France … is working with manufacturers and regulatory agencies to improve the handling of interference, whether intentional or not,” a spokesperson said.AirBaltic said it had taken precautions since noticing an increase in incidents. “We have created an appropriate risk prevention plan and action algorithm, guided by the aircraft manufacturer’s instructions,” a spokesperson said, without giving more details.Plane manufacturers have issued guidance following OPSGROUP’s warning, but industry sources said this related more to temporary workarounds than a long-term solution.In addition to navigation, airliners rely on GPS for a host of on-board calculations. Two pilots, who declined to be named due to the sensitivity of the matter, told Reuters they had been switching off their GPS systems and using alternative navigation techniques when flying over areas where spoofing has been reported.Some industry players said that, rather than mandating airlines buy anti-spoofing technologies, regulators could opt to boost training for pilots so they can identify when they are being spoofed and move to alternative navigation methods. “If I know that I am transiting near Iran and that there have been incidences of GPS jamming, I probably would not rely on GPS,” said Matt Thompson, senior technical adviser for the Association of Old Crows, a U.S.-based nonprofit specialising in electronic warfare and tactical information operations. More

OTTAWA (Reuters) – The Bank of Canada (BoC) is expected to keep its overnight rate on hold on Wednesday when it also releases new inflation and growth forecasts that should provide insight into the central bank’s view on when borrowing costs may begin to ease.The BoC governing council has held rates steady at three consecutive policy meetings after last hiking in July to a 22-year high of 5.0%. Annual inflation in December was 3.4%, still higher than the central bank’s 2% target but below a peak of 8.1% in June 2022.”There’s no denying there’s been progress on bringing inflation lower; however, it’s also clear that there’s still plenty of work to do in order to get back to 2%,” Benjamin Reitzes, managing director and macro strategist at BMO Capital Markets, said in a note.”Rate cuts are very likely in 2024, but the Bank of Canada is going to remain as patient as possible for inflation and inflation expectations to retreat further,” he added.The rate decision will be announced 15 minutes earlier than has been custom, at 9:45 am ET (1445 GMT), when updated economic forecasts in the Monetary Policy Report (MPR) will also be released.Money markets are expecting a cut of 25 basis points in June after having pushed back bets for a cut in April following the release of December inflation data, which rose from November.The BoC will hold rates on Wednesday and at its next meeting in March, according to a Reuters poll of 34 economists. In the same survey, 12 analysts forecast that the first rate cut since March 2020 would come in April, while about two-thirds expect one in June or later. While inflation has been sticky, economic growth has been sluggish, and some economists warn that interest rates are going to have to start coming down soon to head off a more severe downturn.In the third quarter of last year, the economy contracted, and the BoC’s quarterly business survey showed that firms have fewer orders than a year ago. An increasing number of firms expect a recession over the next 12 months.The BoC, in its last round of forecasting in October, said it expects inflation to return to the 2% target by the end of 2025 and forecast 0.8% annualized growth in both the third and fourth quarters of last year.”It’s time for the Bank of Canada to drop the explicit threat of higher interest rates and replace it with a statement about keeping policy restrictive for as long as necessary,” Royce Mendes, head of macro strategy, said in a note. “The possibility of recession is very real.”As it held rates steady, the BoC has so far kept language in its policy announcements saying it is “prepared to raise the policy rate further if needed.” More

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