The data will likely show that IPCA headline inflation for October increased by 0.67% m/m after growing by 0.45% m/m in September, and core (trimmed means) prices gaining 0.47% m/m from 0.43% m/m. This would push the headline and core yearly rate away from the target (4.5% +/- 1%) to 5.11% and 5.23%, respectively. Higher food prices and demand-pull pressures likely continued to exert upward pressure on inflation.
Figure 1: Brazil’s Consumer Prices (IPCA, y/y)
Source: IBGE and RGE
RGE expects retail sales to decelerate to 10.2% y/y in September, compared with the three-month moving[...]