Brazil IPCA-15 deceleration is finally here

August IPCA-15 was line with consensus expectations, printing at 0.43% m/m and compatible with a 9.57% y/y print. Relative to the forecast, the main surprises were concentrated in the transport and housing groups, due mainly to downward pressure from airfares.

The average of the three core measures decreased, in seasonally adjusted terms, to 0.70% from 0.83% in July. Services inflation also moved lower, to 0.40% from 0.56%, while tradables inflation had a more smooth decrease, to 0.44% from 0.56%.

 The decrease in the monthly inflation readings is a trend which should be observed throughout Q3 15 and should be given some support for the Copom strategy of keeping the Selic rate steady for a "sufficient prolonged period of time," as presented in the latest meeting minutes.

"Our scenario remains that the Copom is done hiking, and any monetary policy easing would come by the end of Q1 16", says Barclays.