The slightly softer-than-expected Brazilian inflation figure, of 10.7% y/y, isn’t going to stop Copom from hiking the Selic rate by another 150bp (to 10.75%) when it meets in early February. But it does provide a sign that inflation is stabilising a bit sooner than most analysts had expected, and supports our view that the tightening cycle won’t have much further to run after the February meeting.
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