The CPI in Brazil for June was dovish relative to expectations even if there was some acceleration in the headline print (4.23% actual, 4.32% consensus, 3.93% prior). Meanwhile, core measures have been fairly flat, with the June average of 3.58% just marginally higher than May’s print of 3.55%. The lower-than-expected figure supports a knee-jerk recovery in asset prices, although the BCB may still be concerned about an acceleration in headline inflation and, more importantly, core inflation that does not continue to moderate towards the target.
For more, including market takeaways, please see full note.