Emerging Markets Economics Update Are we facing a re-run of the 2014-16 oil price crash? The recent oil price shock has invoked comparisons with 2014-16, when prices fell to similarly low levels and large EMs – notably Brazil and Russia – entered crises. But this time around, we think... 11th March 2020 · 3 mins read
Latin America Data Response Brazil IPCA (Feb. 2020) The modest decline in Brazilian inflation, to 4.0% y/y, probably gives Copom leeway to lower the Selic rate by 25bp when it meets next week, despite the fall in the real. 11th March 2020 · 2 mins read
Latin America Economics Update What next for the Brazilian real? The Brazilian real has fallen to a record low and, while our central view is that it will recover some lost ground in the second half of the year, it will remain much weaker than most currently... 5th March 2020 · 3 mins read
Emerging Markets Economics Update Coronavirus to trigger more widespread EM rate cuts The continued spread of the coronavirus and the Fed’s emergency rate cut will result in more aggressive loosening in EMs than we previously envisaged. We expect central banks in much of Emerging Asia... 4th March 2020 · 3 mins read
Latin America Data Response Brazil GDP (Q4 2019) Brazil’s relatively strong 0.5% q/q GDP growth rate recorded in Q4 masked a sharp loss of momentum late in the quarter. Taken together with growing headwinds from the effects of the coronavirus more... 4th March 2020 · 2 mins read
Latin America Data Response Brazil IPCA-15 (Feb. 2020) The modest fall in Brazilian inflation in the middle of the month, to 4.2% y/y, confirmed that it has passed its peak. The headline rate is likely to edge down further over the course of the year... 20th February 2020 · 2 mins read
Latin America Data Response Brazil & Mexico CPI (Jan.) The rise in Mexican inflation from 2.8% y/y in December to 3.2% y/y in January supports our view that, while the central bank will cut interest rates further, the easing cycle won’t go as far as... 7th February 2020 · 2 mins read
Latin America Economics Update Brazil: the implications of central bank independence The Brazilian government’s plans to enshrine full central bank independence in law would help to both keep longer-term inflation expectations low and bring down real interest rates. This adds to the... 6th February 2020 · 3 mins read
Latin America Economics Update Brazil: easing cycle over, but rates to stay low The statement accompanying the Brazilian central bank’s meeting last night gave a clear steer that the easing cycle is now over. With growth likely to stay weak and inflation low, we expect that the... 6th February 2020 · 3 mins read
Latin America Data Response Brazil Industrial Production (Dec.) The larger-than-expected 0.7% m/m fall in Brazilian industrial production in December provides further evidence that the economic recovery was stumbling at the end of last year. This reinforces our... 4th February 2020 · 2 mins read
Latin America Economics Weekly Another rate cut in Brazil looks likely Dovish comments from Brazil’s central bank governor and the continuing shift in market expectations have prompted us to pencil in a 25bp interest rate cut next Wednesday. Chilean policymakers held... 31st January 2020 · 5 mins read
Latin America Data Response Brazil & Mexico Bi-Weekly CPI (Jan.) The above-target Brazilian inflation reading for the middle of January reduces the chance of an interest rate cut next month. Mexican inflation also rose, supporting our expectation of a short easing... 23rd January 2020 · 2 mins read
Latin America Economics Focus Brazil: stuck in the slow lane The prevailing view that this will be the year when Brazil’s recovery finally shifts up a gear looks overly optimistic. We expect that GDP growth will come in at just 1.5% over 2020, which leaves us... 14th January 2020 · 12 mins read
Latin America Data Response Brazil IPCA (Dec.) & Mexico Ind. Production (Nov.) Strong Brazilian inflation – which jumped to 4.3% y/y last month – and signs that the economy is on a firmer footing, suggest that the further interest rate cuts some still expect in early 2020 won’t... 10th January 2020 · 2 mins read
Latin America Data Response Mexico CPI (Dec.) & Brazil Ind. Production (Nov.) Mexican inflation eased again in December, supporting our view that policymakers will continue to cut rates this year. Elsewhere, the larger-than-expected 1.2% m/m fall in Brazilian industrial... 9th January 2020 · 2 mins read
Latin America Data Response Brazil IPCA-15 (Dec.) The sharp rise in Brazilian inflation, to 3.9% y/y in the first half of December, from 2.7% a month earlier rules out another interest rate cut at the next central bank meeting in February. 20th December 2019 · 2 mins read
