June trade figures out this week reinforced how perilous Argentina's balance of payments situation is, but officials continue to opt for temporary fixes rather than addressing the root problem - the overvalued exchange rate. The longer the can is kicked down the road, the higher the risk of an even more painful and disorderly devaluation further ahead. Elsewhere, although Brazil stands to benefit from the EU-Mercosur trade deal, President Lula has thrown a spanner in the works. Finally, Chile's central bank is likely to be the first major central bank in the region to commence its easing cycle next week.
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