The raft of April inflation figures released this week showed a more marked decline in core price pressures. That being said, we don’t think inflation (or interest rates) will fall as far as many expect over the coming quarters. In Chile, the likelihood of a more radical overhaul of the constitution has diminished following the strong performance of right-wing parties in last Sunday’s vote for the country's new Constitutional Council. Finally, the Mexican peso rose to a new multi-year high against the dollar this week, but we think that a likely recession in the US, and the ensuing risk-off environment, will cause the rally to reverse before long.
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