BCA Research’s Emerging Markets Strategy service recommends investors go long Mexican bank stocks / short Brazilian banks, currency unhedged. Bank stocks have been the strongest performers in the Mexican bourse over the…
Mexico is caught between crosscurrents. On the one hand, headline and core inflation are at multi-decade highs. On the other hand, genuine inflationary pressures are subdued, and fiscal and monetary policies are hawkish. Going…
Remain cautious and defensive overall. Stay long DM Europe over EM Europe. Look for EM opportunities in Southeast Asia and Latin America over Greater China.
We recently highlighted that the Brazilian real was among the best performing major currencies in 2022 (second only to the dollar). However, the BRL’s relative strength has reversed in recent months and it has been among…
The only feasible way for Brazil to stabilize its public debt-to-GDP ratio is by having nominal GDP growth meaningfully above government borrowing costs. This requires large fiscal stimulus to boost nominal GDP and much lower…
Both Brazilian equities in USD terms and the currency have dropped below their 200-day moving averages since the electoral return of ex-President Luiz Inácio Lula da Silva on October 31, as investors discount a reversal in…
Peru is not suffering from economic or financial excesses: genuine inflation is subdued, fiscal and monetary policies are orthodox, and external accounts are healthy. While political instability has risen anew, markets will likely…
On Monday, investors cheered former president Luiz Inácio Lula da Silva’s (Lula) victory over incumbent Jair Bolsonaro in the second round of Brazil’s presidential election held over the weekend. However,…
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…