Terms of trade boost, Copom: 25bp vs 50bp

As net energy exporters, most major Latin American economies benefit on net from the renewed leg up in oil prices. As thing stand, we don't think the inflationary impact will stop Brazil's central bank from starting its easing cycle next week, although the risks to our forecast for a 50bp cut lie to the upside. Elsewhere, in countries where interest rates are already close to or at their neutral level (Mexico, Chile and Peru), central banks are now likely to leave rates unchanged (rather than cut) this month. A higher and more sustained rise in energy prices could prompt a few to hike (alongside Colombia, which is already doing so).