Brazil & Mexico Consumer Prices (Jul.)

The rise in Brazilian inflation to 2.3% y/y in July is unlikely to worry the central bank and, with the economy still very weak, we expect the Selic rate to stay at its current historic low through this year and next. In a similar vein, the Mexican CPI data released earlier today showing a rise in inflation to 3.9% y/y last month is unlikely to prevent another 50bp cut in the policy rate at Banxico’s meeting next week.