BCA’s Emerging Markets strategists continue to underweight Brazilian equities, local bonds, and sovereign credit, and initiated a receiver position in 2-year swap rates. Brazil’s public debt remains on an unsustainable trajectory,…
A potential right-wing government in 2027 will not stabilize the trajectory of the public debt-to-GDP ratio. Unsustainable public debt, a large current account deficit, and a sharp growth slowdown will lead Brazilian markets to…
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.
Banxico’s dovish stance reinforces our bullish view on Mexican local currency debt. The Mexican central bank cut interest rates by another 50 basis points to 8%. The central bank will continue easing monetary policy well…
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…
Peru’s economic resilience will help its markets outperform their EM peers. A global growth downturn will weigh on EM assets in absolute terms, but Peruvian markets offer attractive tradeable opportunities. The Andean…
The latest political developments in Argentina increase the odds of further liberalizing reforms and solidify the economy’s structural upside. First, the libertarian governing party came out on top in Buenos Aires’ legislative…
Peru’s economic resilience will help its markets outperform their EM peers. Domestic macro fundamentals are robust, and strong external accounts will lead to a stable-to-strengthening currency versus the US dollar. Overweight…
Banxico’s 50 bps rate cut reinforces our bullish view on Mexican bonds, with easing likely to continue as inflation falls and growth slows. The central bank unanimously lowered its policy rate to 8.5%, and we expect further cuts…
