Despite higher oil prices, Colombian risk assets will underperform their EM peers in the months ahead. The domestic economy is evolving from stagflation into recession, and fiscal and political risks will raise the risk premium of…
Coffee prices have surged in recent days and have now gained 8.5% over the past week. Two main forces are behind this rally. First, the recent pause in the US dollar strength is a tailwind for coffee prices. In particular, the…
Colombian assets are inexpensive, but they are cheap for a reason. The economy is entering a growth recession while inflation will remain sticky and above target. Further, President Gustavo Petro’s policies will lead to lower…
Executive Summary Colombian Stocks Failed To Break Above Technical Resistances The economy is booming, but capacity constraints are already biting. Structurally, the election of leftist Gustavo Petro will entail a…
Strong domestic growth and sky-high oil prices have supported the rally in Colombian equities and the currency this year. However, a business cycle slowdown, an uncertain outlook for oil prices, and rising political risk will…
Executive Summary The Economy Will Enter A Slowdown Colombian stock prices and the peso rallied earlier this year, but the rebound is over. Hawkish monetary and tight fiscal policies will slow down domestic demand…
Executive Summary Petrocurrencies Have Lagged Terms Of Trade Petrocurrencies have lagged the surge in crude prices. This has been specific to the currency space since energy stocks have been in an epic bull market.Both cyclical and…
Note: An update on Peru is available on page 10. Highlights The longer it takes the Colombian government to drastically expand fiscal policy and increase social benefits, the higher the risk that next year’s presidential…
Colombian assets are reeling after President Ivan Duque withdrew a tax reform proposal on Sunday following deadly street protests and political opposition. Finance Minister Alberto Carrasquilla, who designed the bill, resigned on…
Highlights Inflation will undershoot, prompting rate cuts by the central bank. The long end of Colombia’s local currency yield curve offers great value. Continue betting on lower 10-year swap rates. The currency is cheap but…