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 further hikes to the Selic rate lie in store. Elsewhere, the drop in Mexico’s headline inflation, to 4.6% y/y, means that Banxico will almost certainly continue with its easing cycle over the coming months.
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