The fall in Mexico’s inflation to 7.1% y/y in the first two weeks of the year gave the first sign that inflation has peaked and we think that it will continue to trend lower over the coming months. That said, the further rise in core inflation, to 6.1% y/y, will be a concern for the central bank, suggesting that it will deliver another 50bp rate hike, to 6.00%, at its meeting next month.
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