In Chile, the trader’s survey revealed expectations of another 25bp cut at October’s meeting

In Mexico inflation surprised to the upside and in our opinion, is likely to remain above the upper bound of the inflation target at least until October, before decreasing slightly in the last two months of the year. Risks to our 3.8% year-end inflation forecast are tilted to the upside. Although we now expect slightly higher core prices in 2015, the absence of demand-side pressures continues. Meanwhile the activity indicator showed an unexpected positive performance, we maintain our expectation of a gradual recovery in domestic demand and continuity in the external momentum for the coming months in line with 2.5% YoY GDP for 2014.

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