Summary - Mex Inflation, COPOM

MEXICO - MXN firmed yesterday, slightly against trend as the DXY gained 0.2%. Positive coronavirus vaccine updates overshadowed concerns about resurgent infections. The Mexican Government have announced plans to start vaccinating its citizens at the end of the third week of December, starting with health workers. President AMLO added the vaccines will be "universal and free", but also voluntary and he hopes the full population will be vaccinated by the end of 2021.

• *1200GMT/0700ET – NOV CPI m/m Expected 0.15% vs Prior 0.61%, Y/Y Exp 3.41 vs Prior 4.09%. The result would drop inflation below the ceiling of the 3.0% +/- 1 percentage point target for the first time since July.
• USDMXN made 9-month lows before retracing slightly into the close, 1970 holding again this morning.

BRAZIL - Local assets did not react well to the above consensus inflation readings. Local swap rates rose 5-7bps across the Belly, while the Ibovespa dropped 0.2% to 113.3k. USDBRL traded below 5.07, but had a steady grind higher to end the day up 0.3%.

• The Estadão newspaper article regarding a preliminary proposal to ease/circumvent the Spending Cap, circulating among Congress leaders, likely added to the small retracement in local assets.
• Also, COPOM out this evening, expected announcement sometime after 2130GMT/1830Local as per 17^th Nov. communication. All analysts surveyed expect Selic Rate unchanged at 2.0%.

Chile, Colombia and Argentina return from local holidays.