Latam Weekly: Brazil Election Results, Regional CPI, BCRP DecisionGLOBAL ECONOMICS

Key arguments

• Brazil's election outcome and the Lula-Bolsonaro margin will drive Monday's market reaction; a closer-than-polled result could rally Brazilian assets on higher odds of a pro-business presidency.
• Regional September inflation is estimated to accelerate 0.1-0.3ppts in Chile, Colombia, Mexico and Brazil, with Colombia's BanRep having surprised with a 25bps hike to 12.25%.
• Scotiabank expects a BCRP hold at 4.25%, as monthly price gains have been in line or below historical averages and 12-month expectations stand at 3.09%.
• Peru is on track to meet its 1.8% of GDP fiscal deficit target for a second consecutive year, with the 12-month deficit at 1.0% of GDP through August; Mexico's formal hiring is cooling.

Corresponding source evidence

1. • In today’s report, the team in Peru covers fiscal developments in the country with an expectation that the government will meet its fiscal deficit target of 1.8% for the second consecutive year, while our economists in Mexico go over the latest formal employment data that point to a cooling in hiring.
2. • In today’s report, the team in Peru covers fiscal developments in the country with an expectation that the government will me et its fiscal deficit target of 1.8% for the second consecutive year, while our economists in Mexico go over the latest formal employment data that point to a cooling in hiring.
3. G10 schedules are a bit quieter than usual (Canadian employment a nd the Fed’s minutes are the standouts), which should give local Latam markets more room to trade on local determinants on top of the broad global market mood that remains highly attentive to energy markets and steep increases in borrowing rates.