RECAP

MEX - USDMXN stabilises around 19.75 consolidating 1.2% Peso gains for the week. Focus on the data calendar will be mid-month CPI prints next Friday as we approach a very much live meeting in February where many think Banxico will restart the easing cycle.

BRAZIL - Brazilian swap rates had a move following comments from the speaker requesting an emergency committee meeting regarding the crisis developing in Manaus. Fears that emergency measures could intensify the pressure on the spending cap and hence increase the likelihood of rate hikes in the near future saw the front end move 10 basis points higher and the curve bear flatten. USDBRL is 1.75% higher today but closes the week down 2% after adhering to technical resistance above 5.50. Potential headwinds for the Real may reappear as the domestic news flow begins to pick up near the reconvention of congress. The COPOM may look to hold fire on any action next week, however, the statement will monitored very closely for any hints as policy normalisation ahead.