Growth has slowed sharply in Brazil and Mexico – Latin America’s two largest economies – over the past quarter. In Brazil, there are tentative signs that a two-year boom in domestic demand has started to cool. Meanwhile, industry appears to be in recession. All told, it seems that GDP growth stagnated in q/q terms in the third quarter. Likewise, Mexico’s economy appears to be treading water as demand from the US wanes. We do not expect a prolonged slowdown, but we do expect regional growth to disappoint over the next 6-12 months. This in turn should mean that more countries follow Brazil’s lead and cut interest rates.