The recent fiasco with Brazil's 2021 budget, which will have to be approved next week, suggests that commitment to fiscal support is fraying. This has resulted in a higher risk premium on Brazilian bonds, and adds to the reasons to expect further monetary tightening in the coming months. Elsewhere, investors were clearly relieved by the outcome of Ecuador's election, but it will be a tough ask for incoming President Lasso to keep bondholders onside. Meanwhile, Peruvian financial markets have struggled on the back of the surprising election outcome there.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services