Brazil's benchmark Ibovespa index inched down to below the 163,000 mark on Monday, pulling back from the record level that was tested last week as markets continued to assess the outlook of domestic borrowing costs. Banks led the losses in the session, with Bradesco, Banco do Brasil, and Itau dropping between 1.5% and 0.5% amid the uncertain outlook for Brazilian credit this year, with evidence of stubborn core services inflation and record-low unemployment levels limiting the room for rate cuts by the central bank expected in later meetings. Meanwhile, commodity giants were muted with Petrobras and Vale inching close to the flatline.