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Industry recovered only slowly May, June probably better The 1.4% m/m rise in Brazilian industrial production in May only partially reversed the falls in output in the three preceding months. And while surveys point to a stronger reading in June, the …
2nd July 2021
Rise in inflation keeps plenty more tightening on the table The further rise in Brazilian inflation, to 8.1% y/y in the middle of June, keeps Copom on track to increase the Selic rate to 6.50% (from 4.25% now). But we don’t think that the inflation risks …
25th June 2021
Banxico to keep looking through above-target inflation The strength of the Mexican headline and core inflation readings in the first half of June is likely to prompt a more cautious approach by Banxico at its meeting later today. Even so, we suspect that …
24th June 2021
A small bump in the road The surprise drop in Mexican industrial production in April may partly be payback for a strong March. And early indicators suggest that industrial activity picked up in May. Moreover, with services sectors recovering, we continue …
11th June 2021
Copom to hike by a further 75bp next week The further jump in Brazil’s headline inflation rate last month, to 8.1% y/y, makes a 75bp hike in the Selic rate (to 4.25%) next week certain and Copom will probably signal that another 75bp hike is on the cards …
9th June 2021
Rise in core inflation unlikely to last The rise in Mexican core inflation to its highest rate in over three years in May, at 4.4%, appears mainly to be related to temporary factors. Policymakers at the central bank will probably continue to adopt …
Industry hit in April, but probably turned the corner in May The worse-than-expected 1.3% m/m decline in Brazilian industrial production in April is likely to be followed by a partial recovery last month. That said, the latest surveys suggest that …
2nd June 2021
Economy showing resilience to virus waves The 1.2% q/q expansion in Brazil’s GDP suggests that the economy held up well during the country’s second virus wave and more timely figures point to a rapid recovery from the more recent third wave. These figures …
1st June 2021
Inflation jump to keep Copom hiking in June The further rise in Brazilian inflation, to 7.3% y/y in the middle of May, can partly be pinned on unfavourable base effects, but there are also signs of a broader increase in goods inflation. While this …
25th May 2021
Underlying price pressures starting to build The drop in Mexico’s headline inflation to 5.8% y/y in the first half of May was driven by a sharp fall in energy inflation. While we expect that this trend will continue in the coming months, there are signs …
24th May 2021
Recovery hitting a temporary bump The softer-than-expected 3.2% q/q rise in Chilean GDP in Q1 will probably be followed by a marked slowdown in Q2 caused by the lockdown at the start of the quarter. Nonetheless, high-frequency data are already showing …
18th May 2021
Manufacturing bounces back after power outages in February The 0.7% m/m rise in Mexican industrial production in March masked a more impressive 3.0% m/m increase in output in the key manufacturing sector, which recovered from disruptions caused by power …
12th May 2021
Inflation jump points to another rate hike in June The further jump in Brazilian inflation to 6.8% in April makes another 75bp rate hike (to 4.25%) at the next central bank meeting in June highly likely. But the breakdown of the data provides reason to …
11th May 2021
Banxico unlikely to be concerned by inflation jump The surge in Mexico’s inflation to 6.1% y/y in April was mainly driven by unfavourable base effects linked to fuel prices and this impact should unwind over the coming months. We think that Banxico will …
7th May 2021
Slump in industry unlikely to deter further rate hikes The 2.4% m/m drop in Brazil’s industrial production in March is a clear sign that the severe virus outbreak has put the economic recovery into reverse and the data for April may be worse still. But …
5th May 2021
Recovery slowed in Q1 but back on track in Q2 The modest 0.4% q/q rise in Mexico’s GDP in Q1 largely reflects the economy’s poor performance at the start of the year. The good news is that the recovery got back on track at the end of the quarter and in …
30th April 2021
Rise in headline rate to keep Copom tightening The jump in Brazil’s inflation to 6.2% y/y in mid-April is likely to keep the central bank on course to hike the Selic rate by 75bp, to 3.50%, at its meeting next week. The outturn was a little lower than …
27th April 2021
All about the base The jump in Mexican inflation to 6.1% y/y in the first half of April was primarily linked to unfavourable base effects from low oil prices a year ago. We doubt that this will concern the central bank, and we expect it to keep its policy …
22nd April 2021
Inflation spike means further hikes on the cards The jump in Brazilian inflation to 6.1% in March was largely a result of rising energy inflation, which will be transitory. Even so, the central bank is clearly worried by above-target inflation and another …
9th April 2021
Industry resilient despite power outages The surprising 0.4% m/m rise in Mexico’s industrial production in February came despite the hit to manufacturing and utilities output from power outages. The industrial sector probably gained further ground in …
Banxico likely to look through surging inflation The jump in Mexico’s headline inflation, to 4.7% y/y in March, was driven once again by higher fuel inflation. We think this trend has a bit further to run, but the central bank is likely to look through …
8th April 2021
Disappointing February likely to be followed by further weakness The 0.7% m/m drop in Brazilian industrial production was led by the auto sector, which may reflect supply shortages but also weakening demand following the end of emergency income support. …
1st April 2021
Inflation starts to surge The surge in Brazilian inflation to 5.5% y/y in the middle of March – its highest rate in over four years – has further to run and the headline rate looks set to reach 7.5% y/y in Q2. That will result in further interest rate …
25th March 2021
Above-target inflation spells end of Banxico’s easing cycle The continued rise in Mexican inflation to 4.1% y/y over the first half of March, above the central bank’s 2-4% target range, will almost certainly put an end to Banxico’s easing cycle. We think …
24th March 2021
Latin America’s shining light The 6.8% q/q rise in Chile’s GDP in Q4 shows the economy headed into 2021 with significant momentum. And the outlook is bright given the country’s swift vaccine progress. As a result, we are revising up our 2021 GDP growth …
18th March 2021
Industry to be a drag on GDP in Q1 The small 0.2% m/m rise in Mexican industrial production in January masks a concerning 0.5% m/m fall in manufacturing output. The sector will have also fared poorly in February following the disruption caused by power …
12th March 2021
Inflation jump seals the deal on a rate hike next week The jump in Brazilian inflation to a stronger-than-expected 5.2% last month makes it almost certain that Copom will begin a tightening cycle next week. While we’ve pencilled in a 50bp rate hike (to …
11th March 2021
Rising inflation signalling end to Banxico’s easing cycle The further rise in Mexico’s headline inflation, to 3.8% y/y in February, was largely driven by higher fuel prices. This trend has further to run in the coming months which, alongside the recent …
9th March 2021
Signs of a slowdown The 0.4% m/m rise in Brazilian industrial production in January, down from 0.8% m/m in December, confirms that momentum in the sector is easing. Moreover, with services sector being harder hit by the second wave of COVID-19 this year, …
5th March 2021
Strong H2 2020 recovery, but slowing in 2021 The larger-than-expected 3.2% q/q rise in Brazilian GDP in Q4 confirms that the economy had one of the better performances in Latin America last year. But there is strong evidence to suggest that the recovery …
3rd March 2021
Rising inflation probably won’t push Copom to hike … yet The rise in Brazilian inflation, to 4.6% y/y, in the middle of this month shifts the balance a bit further an interest rate hike at the next Copom meeting in March, but there are reasons to think …
24th February 2021
Strong Q4 to be followed by Q1 stumble The robust 6.0% q/q rise in Colombia’s GDP in Q4 marks a solid end to 2020, but the recovery will slow sharply in Q1 due to the tightening of restrictions. The outturn was in line with our forecast, but below the …
15th February 2021
Renewed weakness supports case for additional rate cut The small 0.1% m/m rise in Mexico’s industrial production in December confirms that the economy lost significant momentum at the end of last year. The renewed economic weakness may help to convince …
11th February 2021
Rising inflation makes rate cut in Mexico less likely The rise in Mexican inflation in January makes Thursday’s interest rate decision a close call, although we still think a 25bp rate cut is more likely than not. Meanwhile, the further increase in …
9th February 2021
Industrial recovery strong in late 2020 but headwinds building The robust 0.9% m/m rise in Brazil’s industrial production caps off a strong recovery in the sector over the second half of 2020. But the unwinding of fiscal stimulus and the rampant second …
2nd February 2021
A robust Q4 but recovery to halt in Q1 The solid 3.1% q/q rise in Mexico’s GDP in Q4 meant that the economy had recouped over 70% of its losses from the first half of 2020. However, the recent surge in new COVID-19 cases will cause the recovery to grind …
29th January 2021
Inflation set to jump in Q2 The above-target Brazilian mid-month inflation reading for January, of 4.3% y/y, is likely to be followed by a jump in the headline rate in the coming months, keeping Copom in hawkish mood. But while Brazil’s central bank will …
26th January 2021
Soft inflation to allow one final rate cut The small rise in Mexican inflation, to 3.3% y/y over the first half of January, was largely driven by higher fuel prices and is unlikely to be a major concern for the central bank. We continue to expect one …
22nd January 2021
Food inflation peaking, but inflation to stay above target for most of 2021 The larger-than-expected rise in Brazilian inflation, to 4.5% y/y last month, coupled with the prospect of above-target inflation for much of 2021, will prompt an increasingly …
12th January 2021
Solid industrial sector likely to be resilient The solid 1.1% m/m rise in Mexican industrial output in November, coupled with more timely auto production data, suggests that the sector added around 1.5%-pts to q/q GDP growth in Q4. Moreover, we suspect …
11th January 2021
Industrial recovery strong in late 2020 but headwinds building The solid 1.2% m/m rise in Brazilian industrial production in November, coupled with strong surveys for December, suggests that the sector may have added some 0.5-0.6%-pts to q/q GDP growth in …
8th January 2021
Weakening inflation to allow one final rate cut The further fall in Mexican inflation, to 3.2% in December, was largely driven by a drop in food inflation. With headline inflation likely to stay within Banxico’s 2-4% target range in the coming months, we …
7th January 2021
Soft inflation will allow Banxico to resume easing cycle The further fall in Mexico’s headline inflation, to 3.2% y/y in the first two weeks of December, was largely driven by a drop in food inflation. Nonetheless, underlying price pressures remain muted …
23rd December 2020
Peaking inflation should ease pressure on Copom The softer-than-expected Brazilian mid-month inflation figure for December, of 4.2% y/y, suggests that the earlier spike in inflation has now passed its peak. Coupled with rising new COVID-19 cases that may …
22nd December 2020
A solid start but weak end to Q4 The robust 2.0% m/m rise in Mexican industrial production in October suggests that the economy started Q4 on a solid footing. But more timely indicators imply that the recovery struggled over the rest of the quarter, which …
11th December 2020
Weakening inflation to allow one final policy rate cut The sharp drop in Mexican inflation to 3.3% in November was largely driven by a drop in food and fuel prices, although underlying price pressures also remained soft. With inflation likely to settle …
9th December 2020
Food inflation surges, but core inflation may have softened The further rise in Brazilian inflation, to 4.3% y/y last month, was (again) the result of higher food inflation. But inflation in most other price categories fell last month which may help to …
8th December 2020
Regional outperformer The 7.7% q/q rise in Brazilian GDP in Q3 was a bit weaker than had been expected, but the data still confirm that the economy has fared better than other major Latin American countries so far during this crisis. It looks like …
3rd December 2020
Industry keeping the recovery going The 1.1% m/m rise in Brazilian industrial production in October confirms that, after what looks to have been a very strong Q3, the economy held up well at the start of Q4. Surveys suggest that this continued into …
2nd December 2020
Fall in Mexican inflation supports the case for a rate cut The fall in Mexican inflation, to 3.4% y/y, in the middle of this month, supports our view that Banxico will cut its policy rate by a further 25bp, which we now expect to happen at next month’s …
24th November 2020