Brazil IPCA-15 Inflation Slows to 0.32% in Mid-October, Undershooting Forecasts Ahead of Presidential Runoff

Brazil's IPCA-15 consumer price index rose 0.32% in the month to mid-October, statistics agency IBGE said on Friday, down from 0.70% in the prior month and below the 0.43% expected by economists in a Reuters poll. Prices rose 4.62% over 12 months through mid-October, up from 4.47% but under the 4.73% forecast. The monthly increase was driven by a 0.88% rise in food and beverage prices, with personal expenses up 0.55% and housing costs easing 0.1%. The data lands ahead of a tight presidential runoff between right-wing Senator Flavio Bolsonaro, who led the first round, and leftist incumbent Luiz Inacio Lula da Silva. The central bank targets inflation at 3%, plus or minus 1.5 percentage points. Policymakers meet November 3-4 after a fifth consecutive 25-basis-point cut last month brought the rate to 13.75%. Easing core inflation strengthens the case for further cuts, but the runoff poses fiscal-credibility risk, said Pantheon Macroeconomics' Andres Abadia.