Brazil’s official IPCA rose 0.16% in June, undershooting the 0.31% market forecast and slowing sharply from May’s 0.46%.
Transportation costs drove the miss, with lower airfares and fuel prices, while food consumed at home was broadly stable; housing costs still pushed upward through electricity and water tariffs.
The 12-month inflation rate eased to 4.23% from 4.46%, moving closer to the central bank’s ceiling but remaining above its 3.0% target.
The softer print reduced near-term odds of a rate hike, with the Selic at 10.50% and investors nudging the real higher and the Bovespa up ahead of the late-July Copom meeting.