The Mexican government’s underwhelming business plan for troubled state-owned oil company, Pemex, reinforces our view that it is not willing to implement the reforms necessary to stabilise oil production. Against that backdrop, we think that yields on Pemex debt have further to rise. Elsewhere, the dovish statement accompanying the Chilean central bank’s decision to leave interest rates unchanged at 2.50% yesterday has prompted us to pencil in a 25bp cut at the next meeting in September.
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