Brazil IPCA (Apr.) & Mexico Ind. Production (Mar.)

The sharp fall in Brazilian inflation, to 4.2% y/y last month, was encouragingly broad based among the sub-categories of the CPI basket. But we think the central bank will want to see more evidence that core price pressures are easing before it considers cutting interest rates. Elsewhere, the larger-than-expected decline in Mexican industrial production in March suggests that the GDP growth figure of 1.1% q/q published in the flash estimate may be revised down.