Given the Fed’s hawkish shift and the recent sell-off in the Mexican peso, we now think that Banxico will step up the pace of tightening with a 75bp rate hike next week, to 7.75%. Elsewhere, in Brazil, the recently-released activity and survey data have prompted us to revise up our already above-consensus 2022 GDP growth forecast, to 2.0% (from 1.3%). Finally, Colombia’s presidential election on Sunday between left-wing Gustavo Petro and populist Rodolfo Hernández on Sunday looks too close to call. One key point is that neither candidate seems committed to tighten fiscal policy to reduce medium-term public debt risks.
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