In this chartbook, we look at the balance of payments across DM and EM countries. The US does not fare well, but neither do a few other countries.
The May Brazilian CPI suggests that price pressures may have reached a peak, but do not expect immediate monetary easing to support fixed income markets. Headline CPI slowed to 5.3% y/y from 5.5% April, but core CPI remained flat at…
The most recent Brazilian data surprised positively, but underlying economic troubles will spoil the party for the country’s financial markets. Wholesale inflation came in at -0.49% in May relative to last month, while the…
Brazil’s deteriorating fiscal dynamics and rising stagflation risks reinforce our negative stance on Brazilian assets, both outright and relative to EM peers. The latest global financial turmoil, combined with President Trump’s…
Our Emerging Market strategists downgraded Brazilian equities as public debt dynamics deteriorate and macro fundamentals weaken. While they previously maintained a neutral stance despite being bearish on the Bovespa, the risks have…
Brazilian policymakers are stuck between a rock and a hard place. There is no combination of fiscal and monetary policies that can assure decent growth, on-target inflation, a stable exchange rate, and public debt sustainability. We…
Any additional fiscal tightening and further rate hikes might serve as a band-aid, but not a cure, to Brazilian markets. The country’s risk assets and the currency will continue to face headwinds from an impending recession, a…
Brazil’s economy is like a patient who has been misdiagnosed and is receiving the wrong treatment. The odds of a complete recovery for this patient are not great. Presently, investors are scrutinizing the details of the announced…
According to BCA Research’s Emerging Markets Strategy service, Brazil’s decision to raise interest rates is supported by recent economic data. Back in January of this year, they noted that Brazil would…
The Central Bank of Brazil (BCB) raised interest rates last week. Is this the commencement of a major tightening cycle that will persist well into next year? Despite this move, we maintain that the BCB will cut interest rates…