The small rise in Mexico’s headline inflation rate, to 7.9% y/y, in the first two weeks of January means that there is a growing risk that Banxico delivers a bit more tightening beyond the 25bp increase, to 10.75%, that we expect at February’s meeting. Elsewhere, the fact that Brazil’s inflation rate held steady at 5.9% y/y in the first half of January provides further signs that the big falls in inflation are behind us.
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