LatAm: Inflation in Mexico and Brazil and Copom minutes in focus

In Mexico, inflation is expected to print a 0.50% decline (in line with consensus) during May, which would put yearly inflation below the Central Bank target (3.0%) at 2.90%. 

Later, we will get industrial production (April), for which the market expects a decline of 0.4% m/m and a yearly increase of 1.2%, mainly coming from manufacturing activity.

In Brazil, Copom minutes (Thursday) and May inflation (Wednesday) are the highlights. The recent rate hike by the BCB, largely expected by the market, was to gain credibility and bring down medium-term inflation expectations by tightening in the face of softening activity. 

The Copom minutes are expected to acknowledge the downside risks to growth but to stop short of containing definitive information on the current hiking cycle. Discussion about that will be left for the Quarterly Inflation Report, due to be published by the end of June. 

"We expect the IPCA inflation to increase 0.59% m/m (same as consensus), bringing the y/y inflation reading to 8.31%",said Barclays in a report on Monday.