New bosses for Pemex and the BCB

The nomination of Gabriel Galípolo, an ally of President Lula, as the next head of Brazil’s central bank has raised concerns about the politicisation of monetary policy (and a dovish tilt). But Galípolo has given very hawkish comments in recent media comments, fuelling a debate about whether Copom will hike rates next month. Our sense is that it won’t, particularly if (as we expect) the Q2 GDP figures next week show a modest slowdown. Elsewhere, Mexican President-elect Sheinbaum’s choice for the next Pemex CEO has been met with mixed reviews. But the key point is that Pemex’s debt load will continue to prove problematic, and challenge the government’s efforts to improve the fiscal position.