Latin America
Stay short Greater China assets. Stay long Japanese yen. Hold back on Brazil for now but look forward to opportunities in future.
After years of underperformance, the pieces are finally falling into place for Chilean equities to sustainably outperform their EM peers. Political uncertainty has dissipated with the establishment of a pragmatic government and the rejection of the new constitution. Further, a peak in inflation and interest rates, together with attractive valuations, will support Chilean relative equity outperformance.
Russia’s conflict with the West will escalate and trigger more bad news for risky assets this fall. Beyond that, stalemate looms. Latin American equities present a potential opportunity once the macro and geopolitical backdrop improve.
