Global Markets Update We expect Brazil’s financial markets to struggle We think a combination of domestic and external factors will push up risk premia in Brazil over the rest of this year. This informs our forecasts that the real will weaken and the country’s bonds will... 8th September 2022 · 4 mins read
Latin America Economics Update Chile: nearing the end of the tightening cycle The Monetary Policy Report released by Chile’s central bank today, following on from its larger-than-expected 100bp rate increase to 10.75% yesterday, suggests that its tightening cycle is drawing to... 7th September 2022 · 3 mins read
Latin America Economics Update Brazil Election Watch – the state of the race Former President Lula holds a commanding lead in the polls ahead of Brazil’s presidential election on 2nd October. It seems unlikely that he would govern as radically as his party’s manifesto suggests... 6th September 2022 · 5 mins read
Latin America Economics Update Chile at a turning point Chile’s new constitution, which will be put to the people in a referendum this coming Sunday, would usher in sweeping changes to the country’s current economic model. Even if the constitution is... 1st September 2022 · 6 mins read
Latin America Economics Update Chile’s current account, the peso and FX debts The further widening of Chile’s current account deficit in Q2 combined with an increased reliance on portfolio inflows leave the Chilean peso vulnerable to a deterioration in investor risk appetite... 24th August 2022 · 6 mins read
Latin America Economics Update Mexico and the impact of US economic weakness Weakness in the US economy over the coming quarters is likely to result in softer (rather than a collapse in) demand for Mexico’s goods exports as supply constraints fade, but the recovery in the... 22nd August 2022 · 4 mins read
Latin America Economics Update Colombia: regional outperformer in 2022 The robust 1.5% q/q rise in Colombia’s GDP in Q2 suggests that the economy’s recovery will be among the strongest in the region this year. Strong growth, alongside upside inflation surprises and the... 17th August 2022 · 3 mins read
Latin America Economics Update Banxico to take its foot off the brakes Mexico’s central bank (Banxico) hiked interest rates by 75bp, to 8.50%, for a second consecutive meeting yesterday but, amid mounting evidence that the economy is struggling and with inflation close... 12th August 2022 · 3 mins read
Latin America Economics Update New “superminister” no saviour for Argentina’s woes The appointment of Sergio Massa as head of Argentina’s newly-created economic “superministry” provides some hope that the government will try to stick to its latest IMF deal. But it will be a major... 5th August 2022 · 7 mins read
Latin America Economics Update Copom’s tightening cycle drawing to a close The statement to yesterday’s Brazilian central bank meeting, at which the Selic rate was hiked by 50bp to 13.75%, made clear that Copom is more confident that inflation will fall back and also more... 4th August 2022 · 3 mins read
Latin America Economics We think the Mexican peso will fall further We expect the Mexican peso to fall further against the US dollar amid mounting external headwinds. In view of the wider interest, we are also sending this FX Markets Update to clients of our Latin... 15th July 2022 · 3 mins read
Latin America Economics Update Inflation near a peak, but little comfort for central banks Inflation rose to multi-decade highs in much of Latin America last month and, while it should peak in Q3, headline rates will remain uncomfortably high for some time. Central banks in the region... 14th July 2022 · 4 mins read
Latin America Economics Update Chile’s economy heading into choppy waters Having defied gravity in 2021, this year is shaping up to be much tougher for Chile’s economy and we think that the economy will contract in both Q3 and Q4. Despite the weakening growth outlook, high... 5th July 2022 · 2 mins read
Latin America Economics Update Goodbye Guzmán, hello crisis The news that Argentine economy minister, Martín Guzmán, resigned over the weekend points to growing influence of the Kirchner faction of the government. From an economic perspective, this is likely... 4th July 2022 · 2 mins read
Latin America Economics Update Banxico’s tightening cycle shifts up a gear The Mexican central bank’s shift to a 75bp interest rate hike yesterday (to 7.75%) and the hawkish language in the accompanying statement make another 75bp move at the next meeting in August a done... 24th June 2022 · 3 mins read
Latin America Economics Update Copom: revisiting the 2015-16 playbook The latest Brazilian central bank communications give a strong signal that, when Copom stops hiking interest rates, it will act in a similar way to the end of the last tightening cycle in 2015. The... 23rd June 2022 · 5 mins read
