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Inflation drops, but Copom likely to hike one final time next week The slightly larger-than-expected fall in Brazil’s headline inflation, to 5.3% y/y, was driven by weaker food inflation. Underlying price pressures continued to strengthen and, against …
10th June 2025
Inflation rise won’t prevent further cuts from Banxico Mexico’s headline inflation rate jumped to 4.4% y/y in May but this was mainly driven by stronger non-core prices and so is unlikely to trouble officials at the central bank. Indeed, with the economy …
9th June 2025
Bumper growth keeps door open for another rate hike The 1.4% q/q expansion in Brazil’s GDP was partly driven by a boom in the agricultural sector at the start of the year, which is likely to unwind. But it now looks like the economy is on course to expand …
30th May 2025
Easing inflation increases chances of a hold at Copom’s June meeting The fall in Brazil’s headline inflation rate to 5.4% y/y in the first half of May means that the risks to our forecast for a final hike in June are skewed to the downside. But if the Q1 …
27th May 2025
Banxico looks set for another cut despite rise in inflation The larger-than-expected rise in Mexico’s headline inflation rate in the first half of May, to 4.2% y/y, was driven in large part by non-core components and is unlikely to sway Banxico’s …
22nd May 2025
A strong start to the year The stronger-than-expected 0.7% q/q expansion in Chile’s economy in Q1 on the back of robust domestic demand supports our view that Chile’s central bank will leave its policy rate on hold for a bit longer. But the recent dovish …
19th May 2025
Growth concerns leave the door open for another 50bp cut in June Mexico’s central bank (Banxico) lowered its policy rate by another 50bp, to 8.50%, at today’s meeting and the accompanying communications underlined that policymakers’ concerns have shifted …
15th May 2025
Inflation rises, but Banxico still on course for a 50bp cut next week Mexico’s headline inflation rate edged up to 3.9% y/y in April, but we think that the challenging growth outlook and the relative resilience in the peso leave the door open for another …
8th May 2025
Copom hikes again, but tightening cycle near an end (if not already over) Brazil’s central bank hiked the Selic rate by a further 50bp, to 14.75%, today and officials made clear in the accompanying statement that the tightening cycle is near an end. We …
7th May 2025
Weak economy argues in favour of another 50bp cut The 0.2% q/q expansion in Mexico’s GDP means that the economy dodged a technical recession last quarter. But growth was driven by a rebound in agriculture and the rest of the economy – and the …
30th April 2025
Inflation rises but end of tightening cycle is near The further rise in Brazil’s headline inflation rate to 5.5% y/y in the first half of April means that Copom will press ahead with a 50bp hike in the Selic rate at its next meeting in early May. But …
25th April 2025
Inflation rises, but Banxico more focussed on weak economy The rise in Mexico’s headline inflation rate in the first half of April, to 4.0% y/y, is unlikely to shift Banxico’s focus away from the weakness of the economy and we expect it to deliver another …
24th April 2025
Inflation rises again, Copom to deliver a bit more tightening The jump in Brazil’s headline inflation rate to 5.5% y/y in March looks set to be followed by further increases towards 6% y/y over the coming months. Copom will almost certainly deliver a bit …
11th April 2025
Door is open for another 50bp cut in May The statement accompanying the Mexican central bank’s (Banxico’s) decision to lower its policy rate by another 50bp cut, to 9.00%, today suggests that growth concerns are rapidly overtaking inflation concerns. …
27th March 2025
Inflation rises again, more rate cuts on the cards The further rise in Brazil’s headline inflation rate to 5.3% y/y in the first half of March means that, with Copom shrugging off the weakness of the latest activity data and inflation likely to rise …
The further easing of core services inflation in Mexico in the first half of March combined with recent weak activity data paves the way for Banxico to deliver another 50bp cut at its meeting on Thursday. The headline rate was unchanged from the first …
24th March 2025
Copom shrugs off growth concerns and flags another hike The Brazilian central bank made clear in the statement accompanying today’s 100bp interest rate hike (to 14.25%) that it’s far more concerned about high inflation than weakness in the economy. We now …
19th March 2025
Growth in Chile’s economy slowed to 0.4% q/q in Q4, but more timely monthly activity data suggest that the economy headed into 2025 with more momentum. This, combined with above-target inflation, means that the central bank is likely to stand pat at its …
18th March 2025
Inflation jump keeps door open for more rate hikes The sharp rise in Brazilian inflation to 5.1% y/y in February is likely to be followed by further increases in the coming months. Our base case is that next week’s Copom meeting will see the final (100bp) …
12th March 2025
Period of strong growth comes to an abrupt end The sharp slowdown in Brazil’s GDP growth, to just 0.2% q/q, in the final quarter of last year confirms that the economy’s recent period of strong growth has come to an abrupt end. We now think the economy …
7th March 2025
Another 50bp cut on the cards The rise in Mexico’s headline inflation rate, to 3.8% y/y in February was entirely driven by non-core inflation and therefore won’t be a major concern for the central bank. Indeed, we think that the weakness in the economy …
President Donald Trump's decision to grant a one-month exemption to the Big Three Automakers (Ford, GM & Stellantis) is something of a disappointment given the earlier heavy hints from his Commerce Secretary Howard Lutnick that more widespread relief was …
5th March 2025
Inflation jumps, Copom to deliver more tightening The jump in Brazil’s headline inflation rate to 5.0% y/y in the first half of February means Copom will almost certainly press ahead with another 100bp hike in the Selic rate to, 14.25%, at its March …
25th February 2025
Odds shifting in favour of another 50bp cut The fall in core inflation in Mexico in the first half of February combined with weak economic activity, means that Banxico is likely to press ahead with another 50bp cut at its meeting next month. The outturn …
24th February 2025
The decision by the US and Russia to “lay the groundwork” to end the war in Ukraine marks a potentially significant turning point after three years of conflict. Negotiations will take time and the macroeconomic implications will depend on the features of …
18th February 2025
Fall in inflation won’t stop Copom from hiking again in March The fall in Brazil’s headline inflation rate in January, to 4.6% y/y, was mainly due a drop in housing inflation and is unlikely to prevent the central bank from delivering another 100bp hike …
11th February 2025
Banxico steps up easing as it adopts a more dovish tone Mexico’s central bank stepped up the pace of monetary easing to 50bp at today’s meeting, lowering the policy rate to 9.50%, and the overall communications were dovish. While a tariff-induced drop in …
6th February 2025
GDP collapse argues for larger 50bp cut The much larger-than-expected 0.6% q/q drop in Mexico’s GDP in Q4 is likely to strengthen the argument for a 50bp interest rate cut, to 9.50%, at next week’s Banxico meeting. That now looks like the most likely …
30th January 2025
Copom sticks to its promise Brazil’s central bank delivered on its pledge to deliver another 100bp hike to the Selic rate, to 13.25%, and another 100bp increase at March’s Copom meeting is all but certain. For now, we are sticking with our view that that …
29th January 2025
Inflation eases, but Copom still set to deliver 100bp hike next week Brazil’s headline inflation rate eased to 4.5% y/y in the first half of January, but signs that underlying price pressures continued to build mean that Copom will press ahead with …
24th January 2025
Easing inflation makes February cut highly likely The fall in Mexican inflation in the first half of January, to 3.8% y/y, means that Banxico is likely to continue its easing cycle next month. But with the Fed set to pause its pause its cutting cycle and …
23rd January 2025
Copom to press ahead with more hikes despite fall in inflation The fall in Brazil’s headline inflation rate in December, to 4.8% y/y, coupled with the rebound in the real over the past couple of weeks, won’t be enough to stop Copom following through with …
10th January 2025
Fall in inflation paves the way for further easing The larger-than-expected fall in Mexico’s headline inflation rate, to 4.2% y/y in December keeps the door open for another 25bp cut at Banxico’s February meeting. But a lot will hinge on moves on the …
9th January 2025
Fall in inflation paves the way for further easing The fall in Mexican inflation in the first half of December, to 4.4% y/y, gives Banxico room to continue to ease monetary policy. But we expect Banxico to continue to cut in 25bp steps, rather than step …
23rd December 2024
Banxico cuts, but pace of easing unlikely to be stepped up Mexico’s central bank unanimously decided to deliver another 25bp interest rate cut, to 10.00%, at today’s meeting and the statement flagged that the easing cycle will continue in the coming …
19th December 2024
Fiscal fears and overheating economy trigger a bumper hike Brazil’s central bank stepped up the pace of tightening with a larger-than-expected 100bp hike, to 12.25%, to the Selic rate and made clear that there will be at least two more 100bp increases, to …
11th December 2024
Rising inflation points to Copom stepping up tightening tomorrow The further rise in Brazil’s inflation rate, to 4.9% y/y, in November alongside the weakness in the real and strong economic growth mean that Copom is nailed on to step up the pace of …
10th December 2024
Fall in inflation gives Banxico room to deliver another 25bp cut The fall in Mexico’s headline inflation rate, to 4.6% y/y in November, combined with the relative resilience in the peso since the US election means that Banxico is likely to press ahead …
9th December 2024
Another strong quarter points to larger Selic hike The strong 0.9% q/q expansion in Brazil’s GDP in Q3 will add to the central bank’s concerns that the economy is running too hot. Alongside rising inflation and the sell-off in local financial markets in …
3rd December 2024
Inflation jumps, Selic heading higher The rise in Brazil’s headline inflation rate, to 4.8% y/y, in the first half of November was partly driven by a further increase in underlying core services inflation and means that Copom is likely to raise the Selic …
26th November 2024
Fall in inflation leaves door open for December cut The larger-than-expected fall in Mexican inflation in the first half of November, to 4.6% y/y, alongside easing core price pressures and the relative resilience in the peso mean that Banxico is likely to …
22nd November 2024
Banxico cuts, scope for further easing rests on the peso Mexico’s central bank delivered another 25bp interest rate cut at today’s meeting, to 10.25%, and it left the door open to further easing over the coming months, although a lot will depend on moves …
14th November 2024
Inflation rises, more rate hikes on the cards The further rise in Brazil’s headline inflation rate to 4.8% y/y in October means that the central bank is almost certain to deliver additional interest rate hikes at its upcoming meetings. The risks are …
8th November 2024
Easing core inflation and peso recovery leave 25bp cut in play The larger-than-expected rise in Mexico’s headline inflation rate, to 4.8% y/y in October, was driven entirely by a jump in agricultural price inflation. Core inflation edged down last month …
7th November 2024
Copom hikes again Brazil’s central bank hiked the Selic rate for a second consecutive meeting, by 50bp to 11.25%, today but this has more to do with the domestic macro backdrop and shoring up monetary policy credibility than a response to the market …
6th November 2024
November rate cut hinges on US election The stronger-than-expected 1.0% q/q expansion in Mexico’s economy in Q3 confirms that the economy pulled out of the slump seen in the first half of the year last quarter. We still think the conditions are …
30th October 2024
Banxico’s space to cut hinges on US election The fall in Mexican core services inflation in the first half of October in principle gives Banxico space to press ahead with another 25bp rate cut next month, but much will hinge on the outcome of the US …
24th October 2024
Brazil inflation rises, more Selic hikes incoming The rise in Brazil’s headline inflation rate to 4.4% y/y in September was mainly due to drought-related effects on food and electricity prices but, even so, it will reinforce the hawkishness of Copom and …
9th October 2024
Inflation and growth backdrop supports further easing Mexico’s central bank delivered another 25bp interest rate cut at today’s meeting, to 10.50%, and the communications suggest that it will continue to ease policy over the coming months. We expect the …
26th September 2024
Inflation falls, but Copom still on course to deliver further rate hikes The larger-than-expected decline in Brazil’s headline inflation rate, to 4.1% y/y, in the first half of September is unlikely to prevent Copom from raising interest rates further …
25th September 2024
