Brazil & Mexico inflation head in opposite directions

The latest jump in inflation in Brazil will put pressure on policymakers to raise interest rates further, despite having signalled an end to monetary tightening at last month’s COPOM meeting. In contrast, inflation in Mexico fell last month and is now back within the target range, which will allow the central bank to keep policy loose in order to support the economic recovery. This adds to the reasons to expect Mexico to outperform Brazil this year.