Latin America Economics Weekly

Banxico cuts, LatAm and the global market turmoil

The Mexican peso was on a rollercoaster ride this week but, as we'd expected, Banxico placed more emphasis on the weakness in the economy as it pressed ahead with a 25bp cut (to 10.75%). And the...

9th August 2024 · 6 mins read

Latin America Rapid Response

Brazil IPCA (Jul. 2024)

The rise in Brazil’s headline inflation rate to 4.5% y/y in July was mainly driven by a pick-up in underlying core services inflation which will do little to quell the hawkishness of Copom. But, with...

9th August 2024 · 2 mins read

FX Markets Update

What to make of the latest moves in EM currencies

Heightened US recession worries have helped unwound some of the stretched positions in high-carry EM currencies, resulting in their exchange rates moving closer to their “fair values” (judging by our...

9th August 2024 · 4 mins read

Latin America Rapid Response

Mexico Interest Rate Announcement (Aug.)

Mexico’s central bank opted to reduce its policy rate by 25bp, to 10.75%, at today’s meeting and the statement generally retained the moderately dovish tone from the last one. We think further rate...

8th August 2024 · 2 mins read

Latin America Rapid Response

Mexico Consumer Prices (Jul. 2024)

The rise in Mexico’s headline inflation rate, to 5.6% y/y in July, alongside the weakness in the peso means that Banxico’s interest rate decision later today will be a very close call between a cut...

8th August 2024 · 2 mins read

Latin America Economics Update

Will the BCB hike rates?

The minutes to last week’s central bank meeting in Brazil raised the possibility that policymakers will respond to the worsening inflation outlook by hiking interest rates. And despite the sharp shift...

6th August 2024 · 5 mins read

Latin America Economics Weekly

Venezuela: rig and repress

The declaration that incumbent Nicolás Maduro won Venezuela’s presidential election has been met with protests and international pressure for a full account of the results. But our sense at this stage...

2nd August 2024 · 7 mins read

Emerging Markets Economics Update

EM manufacturing finally running out of steam

The sharp fall in the EM manufacturing PMI suggests that the recent strength of industry may not be sustained in Q3. The declines in the PMIs were broad-based, although they are still relatively high...

1st August 2024 · 2 mins read

Emerging Markets Financial Risk Monitor

EM Financial Risk Monitor (Aug. 2024)

Financial vulnerabilities have continued to ease across EMs. Our EM aggregate currency crisis risk indicator hit a multi-year low in Q2, with especially large falls in Turkey and Pakistan. Sovereign...

1st August 2024 · 1 min read

Event

Drop-In: EM financial risk update – The state of sovereign, bank and FX vulnerabilities

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How has the level of financial risk evolved among emerging markets over the past three months?

Latin America Rapid Response

Brazil Interest Rate Announcement (Jul. 2024)

Rising inflation, a worsening fiscal position and a slump in the real prompted Brazil’s central bank to leave the Selic rate at 10.50% today and strike a more hawkish tone in the accompanying...

31st July 2024 · 2 mins read

Latin America Economics Update

Will Argentina lift capital controls?

The Argentine peso’s overvaluation is becoming an increasing point of concern and attention has shifted to whether the Milei administration will lift capital controls. We think that some form of...

31st July 2024 · 5 mins read

Asset Allocation Update

We are optimistic about EM sovereign bonds’ returns

Our view on emerging market local-currency government bonds is broadly upbeat for the next year or so. We think returns will be largest, in common-currency terms, in Emerging Asia.

31st July 2024 · 4 mins read

Latin America Rapid Response

Mexico GDP (Q2 Provisional)

The weaker-than-expected 0.2% q/q expansion in Mexico’s economy in Q2 means that Banxico is likely to resume its easing cycle at next week’s Board meeting with a 25bp cut to 10.75%.

30th July 2024 · 2 mins read

Latin America Economics Weekly

Venezuela votes, Mexico’s gigafactory & inflation worries

Opinion polls suggest that Venezuela’s election on Sunday could bring Chavismo to an end, allowing the economy to open up and for sanctions to be lifted. But we doubt that the economic damage of the...

26th July 2024 · 8 mins read