BCB to cut soon? Chile’s FX reserves

Expectations for interest rate cuts in Brazil have grown in light of recent developments, but, for now, we’re sticking with our view that Copom will hold off on lowering interest rates until November. And even if rate cuts come a bit earlier than we're anticipating, policy loosening is likely to proceed more gradually than most anticipate. Elsewhere, we doubt that Chile's central bank’s FX purchase programme will have a major bearing on the Chilean peso’s performance and the outlook for monetary policy; we continue to expect the first interest rate cut in July.