UPDATE 1-Mexico inflation continues to ease, headline rate undershoots estimates

Mexico's inflation continued to ease in early October but stuck above the central bank's target, official data showed on Tuesday, in an indication the local monetary authority is set to maintain borrowing costs at high levels in the near term. Annual headline inflation in Latin America's second-largest economy hit 4.27% in the period, statistics agency INEGI said, down from 4.45% at the end of September and undershooting forecasts of 4.38% in a Reuters poll of economists. last year, with the central bank keeping its monetary policy at a restrictive level so it can bring it back to its 3% target, plus or minus one percentage point.