* Brazil (slightly above target): BCB quarterly inflation report revises up 2008 forecasts for IPCA from 4.3% to 4.6% and from 4.2% to 4.4% for 2009. Latest Mar. IPCA reading +0.48%, well above consensus of +0.36% on the back of a rebound in food inflation (+0.89%, up form Feb. +0.60%) higher energy (+1.4%, up from 0.14% in Feb.) and fuel (+0.82%, from -1.42%). Although, services inflation bounced back significantly from +1.45% in Feb. to +0.30% in Mar. YoY IPCA at 4.73% certainly adds to BCB worries. In spite of potentially better food inflation outlook IPCA inflation should remain quite close to the 4.5% target throughout this year.
* Mexico (above target): JP Morgan-> Headline. inflation went down to 0.30% in Feb. from 0.46% in Jan. YoY headline up 3.72% in Feb. from 3.76% in Jan. Inflation also accelerated in the over-year-ago price comparisons that Banxico uses to monitor performance versus its official 3% o-y-a (±1%) inflation target.
* Chile (above target): EIU-> Inflation risk may keep central bank on a tightening mode in 2008. Central Bank of Chile -> Annual inflation is still significantly above the tolerance range. The moderate inflation figure of January reflected the drop in domestic fuel prices and a rapid normalization of the high prices of perishable goods. Core inflation measures, including CPIX1 (which excludes fuels, perishables and some regulated utilities), though still high, have ceased to increase. Exchange rate has appreciated substantially. Long-term inflation expectations remain anchored around 3% per annum. MS -> Chile is facing its most daunting inflation challenge in over a decade. Peso appreciation is the tool most suited to dealing with the problem.
* Colombia (above target): MoM CPI at 0.81% in Mar, down from 1.51% in Feb. – CPI YoY at 5.93%, down from 6.35% in Feb. Early-year CPI surprised on the upside mostly, due to food prices. BNP Paribas -> CB recognizes Inflation expectations are rising and this can affect negatively inflation dynamics. AD remains strong, albeit it has moderated somehow reflecting past monetary decisions.
* Argentina: Neumeyer-> Official CPI do not reflect the reality of prices increases. Public debt indexation to the official CPI could be the reason for maneuvering of the index. JP Morgan -> Inflation reached 20% in 2007.