The raft of June inflation data out this week was not as bad as the rise in the headline rates would suggest, as higher food inflation masked falls in in core inflation. Core inflation appears most stubborn in Mexico. But even there, the minutes to the latest Banxico meeting, alongside the softer US inflation data, suggest that a rate cut in August is looking likely. Finally, the US tariffs placed on Mexican steel and aluminium imports not smelted in North America won't significantly hurt Mexico's economy. But they highlight that Mexico is caught in the crossfire of the trade dispute between the US and China.
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