De la Espriella’s challenges, Copom seeks to clarify

The market reaction to Abelardo de la Espriella’s victory in Colombia’s presidential election hasn’t been as buoyant as might have been hoped, which may reflect concerns about the difficulties he will face in pushing through reforms. Colombia’s highly-fragmented congress is a key impediment in this regard. Elsewhere, communications from Brazil’s central bank this week were arguably hawkish, but still leave the next rate decision up in the air between a hold and a cut. Our working assumption is a cut, and the labour market and inflation figures published in the last few days lend some support to that view.