The further rise in core inflation in the first half of November suggests that the debate at Mexico’s central bank (Banxico) over when to end the tightening cycle is set to heat up. The risks are tilting towards rates rising a bit more than we currently expect. Elsewhere, Brazil’s president-elect Lula has scaled back his plans to circumvent the spending cap, but none of this changes our view that he looks set to oversee a looser fiscal stance. Finally, if Argentina’s shock loss to Saudi Arabia at the World Cup wasn’t enough, there was bad news on the economy too.
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