Although Mexico’s headline inflation rate was weaker than expected last month (at 4.3% y/y), uncomfortably strong services inflation supports our view that Banxico’s easing cycle (likely to start early next year) will proceed more gradually than most expect. Elsewhere, inflation in Chile came in above expectations (at 4.8%) in November, but we still think a 75bp interest rate cut at the central bank meeting later this month is more likely than not.
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