08:23 AM EDT, 06/26/2025 (MT Newswires) -- Societe Generale said it expects Mexico's central bank (Banxico) to deliver its fourth straight policy rate cut of 50bps and lower the key overnight policy rate to 8.0% on Thursday.

Headline inflation edged up to 4.42% year over year in May after returning to the 2%-4% target range earlier this year, but trade-/tariff-related uncertainty and falling investments caused the economy to grind to a virtual standstill, wrote the bank in a note to clients.

A dovish 50bp cut is on the table but Banxico's Monetary Policy Committee could split on 25bps/50bps and lean towards more gradual easing in H2, stated SocGen.

The bank's house call is 7.25% by year-end and 6.50% in 2026 but with upside risks. An impressive 2.2% bounce from Monday's low saw the peso (MXN) buyers resurface near the 50dma (19.35).