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Mexico-Peru Spat Worsens, Ambassador Expelled

LATIN AMERICA
  • The diplomatic spat between Peru and Mexico worsened overnight, with Peru declaring the Mexican ambassador persona non grata and ejecting him from the country. The moves follow Mexico granting the family of former President Castillo asylum in Mexico. The topic will likely feature in AMLO’s daily press conference due at 7am local time (1300GMT).
  • In Peru, Congress approved constitutional reform measures to hold early elections after Castillo’s removal from office. The reforms received two-thirds backing among lawmakers, and puts the next elections in April 2024.
  • Tuesday’s biweekly analyst survey for Mexico continues to show markets expected the next Banxico move to be a 25bps hike in February next year. Year-end inflation for 2022 was revised lower to 8.01% from 8.30%, although 2023 estimates were notched higher to 5.18% from 5.10%.
  • Following several market holidays after Argentina’s world cup win, focus turns to a $1.8bln repayment due to the IMF today.

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