The further fall in Mexico’s headline inflation rate, to 8.1% y/y, in the first two weeks of November was driven by easing non-core price pressures. But core inflation picked up, which will strengthen the hand of the hawks at Banxico in the debate over how much more tightening to deliver. Meanwhile, inflation in Brazil also continued to ease in the first half of this month but, while the tightening cycle there is already over, we think that Copom will wait until the middle of the year before shifting towards rate cuts.
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