The rebased series rose 4.55% YoY, above the BCCh’s 3Q24 projection of 4.37% and up from July’s print of 4.42% (the rebased series is the headline series that BCCh focuses on). Ex-volatiles, the key measure for BCCh policy, remains above the 3.0% target at 3.7%YoY (up from 3.4% last month). Overall, the more volatile components contributed the bulk of the headline increase (20bp of the 0.25% MoM increase), as expected. Much of the contribution in the ex-volatile segment came from services rather than goods (+15bp vs. -9bp contribution to headline, respectively).
The August data was mildly dovish as it supports the BCCh's decision to front-load rate cuts as electricity price adjustments have not contaminated core inflation meaningfully (see IPoM and BCCh reviews). Unfavourable seasonality was the main reason for an increase in YoY measures. We expect rates to trade within the 4.00% to 4.25% range on terminal for now (15m3m a decent proxy: 4.14%), with risks to the downside should economic growth slow. Given the reinforcement of the lower rate path, the print does have a marginally weakening bias for the CLP although the currency will continue to trade with the broader USD and risk also influenced by copper prices. We continue to see 960 as a potential resistance for USDCLP, as 900-960 remains the recent range.
For more, including on rates and FX, please see full note.