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Brazil & Chile CPI (May)

The fall in Brazilian inflation, to 4.7% y/y in May, is set to be followed by further declines, taking it below the central bank’s target. So long as the economy recovers from its recent weak patch, the central bank is likely to refrain from cutting interest rates. But the chances of monetary easing are growing. Elsewhere, the rise in Chilean inflation is likely to dampen expectations for rate cuts in the coming months.

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