The fall in Mexican inflation to 7.1% y/y suggests that the headline rate has peaked, but the central bank will remain concerned about rising core inflation. As such, we expect another 50bp rate hike, to 6.00%, at Banxico’s meeting tomorrow. Elsewhere, although Brazilian inflation ticked up in January, it is likely to start falling again from this month, allowing Copom to slow the pace of its tightening cycle.
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