Parsing Banxico’s minutes, Brazil’s pension debate

The dovish minutes to the last Banxico meeting may have been aimed at ramming home the point that policymakers won’t mechanically follow the Fed in raising rates. But in any case, the fall in the peso and a likely strong Q3 GDP outturn will probably end talk of a possible rate cut. Elsewhere, Brazil’s presidential election enters the final straight, with Flávio Bolsonaro retaining an advantage. His victory might help to bring local currency bond yields down, but that will require tangible steps to tighten fiscal policy, eventually including measures to rein in high pension spending.