Mexico’s Pemex problem, Copom’s politicisation

Comments from Mexican officials this week that the government could take some of Pemex’s debts onto its own balance sheet would ease the firm's default risks. But it would come at the expense of a further deterioration in the sovereign's debt dynamics and might limit the extent to which Claudia Sheinbaum, the likely winner of next month’s presidential election, can pursue her social welfare plans. Elsewhere, the Brazilian central bank’s split decision in favour of a smaller interest rate cut earlier this week revealed divisions that fell firmly along party lines. There's a chance of a more dovish tilt at the central bank when the Lula administration gets to appoint two more Copom members next year.