Latin America
Highlights Remain neutral on the US dollar. A breakout of the dollar would cause a shift in strategy. Russia’s conflict with the West is heating up now that Germany has delayed the certification of the Nord Stream II pipeline. As long as the focus remains on the pipeline, the crisis will…
Highlights Mexico has been experiencing stagflation: core inflation has risen sharply while the level of domestic demand in real terms is well below its pre-pandemic level. Going forward, tight fiscal and monetary policies will put a lid on domestic demand, easing inflationary pressures. The…
Mexican Equities Remain Attractive Among EM Peers…
Bolsonaro Will Abandon Fiscal Discipline Amid Plummeting Popularity…
Highlights Faced with record low approval ratings, President Bolsonaro will try to cling to his seat by all means possible, and his attacks on state institutions will escalate. This will further destabilize the socio-political situation in Brazil. We maintain that Bolsonaro…
Chile: Prepare For Election Turbulence…
Highlights Gabriel Boric – a popular independent left-wing candidate – will likely win the presidential elections. Chile’s financial markets will remain very turbulent with a downward bias until the second voting round in mid-December. We are downgrading Chilean stocks to underweight within…
Highlights Gold prices will continue to be challenged by conflicting information flows regarding US monetary policy; higher inflationary impulses from commodity prices and supply-chain bottlenecks; global economic policy uncertainty, and risks to EM economic growth (Chart of the Week). Concern…
Highlights Asian and European natural gas prices will remain well bid as the Northern Hemisphere winter approaches. An upgraded probability of a second La Niña event this winter will keep gas buyers scouring markets for supplies (Chart of the Week). The IEA is pressing Russia to make more gas…
Highlights The odds of a stronger recovery in EM oil demand next year are rising, as vaccines using mRNA technology are manufactured locally and become widely available.1 This will reduce local lock-down risks in economies relying on less efficacious COVID-19 vaccines – or lacking them…