Suggestions from the governments of Brazil and Colombia have led to a bit of movement towards solving Venezuela’s post-election stand-off. A lot remains uncertain, but our sense is that the likelihood of Maduro leaving office has increased a little. Elsewhere, the batch of strong June activity data from Brazil are likely to reinforce the central bank's hawkish tone, but we still think that the bar for a rate hike is high. Finally, the fall in Argentine inflation to a multi-year low is a victory for the Milei administration. But as long as inflation exceeds the rate of depreciation of the crawling peg, the real exchange rate will continue to appreciate and erode Argentina's external competitiveness.
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