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January 20, 2025

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Brazil Risk Premia and EM Debt
Paying Article

January 20, 2025 8:15 AM UTC

Brazil debt market has two domestic crises rather than a spillover from the U.S. in the form of inflation and fiscal policy. Very restrictive BCB policy can help produce some disinflation and we forecast 4.1% for 2026, which some allow some rate cuts in H2. Brazil risk premium will likely be reduced

January 15, 2025

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Mexico’s Plan: An Eye on Nearshoring and Displacing China in U.S.
Freemium Article

January 15, 2025 1:17 PM UTC

President Claudia Sheinbaum’s “Mexico Plan” targets USD 270 billion in investments, aiming to reduce poverty, boost sustainability, and expand Mexico’s economy. Key goals include nearshoring, increasing domestic production, and fostering U.S. trade relations. However, private investment stag

January 10, 2025

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Mexico CPI Review: Downtrend Continues
Paying Article

January 10, 2025 2:11 PM UTC

December’s CPI grew 0.4%, with Y/Y inflation dropping to 4.2%, above Banxico’s 2%-4% target. Core CPI rose 0.5%, driven by services, while non-core inflation was stable. MXN depreciation’s pass-through impact remains limited. Tight monetary policy supports convergence, but Banxico faces a deci

January 06, 2025

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Mexico CPI Preview: Christmas Acceleration
Freemium Article

January 6, 2025 2:19 PM UTC

Mexico's December CPI is forecasted to grow by 0.5% in December, bringing 2024 inflation to 4.3%, above Banxico's target. Core CPI aligns better at 3.5%. Weak demand aids inflation convergence, expected by Q3 2026. Risks include a 22% MXN depreciation and U.S. tariffs. Banxico is likely to continue

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Markets 2025: A Tale of Two Halves
Paying Article

January 6, 2025 8:10 AM UTC

·  For financial markets, 2025 will likely be a game of two halves.  US exceptionalism will likely drive US equities to extend outperformance in H1, while the USD rises further as tariffs (threats and actual) escalate.  However, 10yr U.S. Treasury yields will likely push higher in H2, which can

January 02, 2025

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EM Government Debt: BRICS Divergence
Paying Article

January 2, 2025 8:05 AM UTC

   Brazil and South Africa suffer from debt servicing costs outstripping nominal GDP, which will remain a concern unless a consistent primary budget surplus is seen – though S Africa enjoys a much longer than average term to maturity than Brazil.  India and Indonesia, in contrast, enjoy nominal

December 30, 2024

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December Outlook: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
Paying Article

December 30, 2024 8:05 AM UTC

All chapters of the December Outlook are now available and simply click the link below. 

December 24, 2024

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December Outlook Webinar on Jan 7: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
Paying Article

December 24, 2024 8:30 AM UTC

    The U.S. economy’s momentum remains reasonable before the impact of President-elect Trump’s policies in 2025 and 2026.  While high uncertainty exists on the scale and timing of policy, the strategic bias is clear – sizeable tax cuts that will boost the budget deficit; tariffs (threats

December 20, 2024

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December Outlook: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
Paying Article

December 20, 2024 12:15 PM UTC

All chapters of the December Outlook are now available and simply click the link below. 

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EMFX Outlook: Hit From Tariffs, Before Divergence
Paying Article

December 20, 2024 10:00 AM UTC

·        EM currencies on a spot basis will remain on the defensive in H1 2025, as we see the U.S. threatening and then introducing tariffs on China imports – 30% against the current average of 20%. China’s response will likely include a Yuan (CNY) depreciation to the 7.65 area on USD/CN

December 19, 2024

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Outlook Overview: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
Paying Article

December 19, 2024 9:25 AM UTC

·        The U.S. economy momentum remains reasonable before President elect Trump’s policies impact in 2025 and 2026.  While high uncertainty exists on the scale and timing of policies, the strategic bias is clear – sizeable tax cuts that will boost the budget deficit; tariffs (threats

December 18, 2024

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LatAm Outlook: Economic Shifts
Paying Article

December 18, 2024 5:21 PM UTC

·       Brazil and Mexico economy are likely to decelerate in terms of growth in 2025, although we see this being stronger in Mexico. Mexico legal reforms and its close ties with U.S. increases uncertainty for 2025, especially after Trump elections, although we see tariffs in 2025 as unlikely

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Jan 7 Outlook Webinar: The Trump Effect- Tariffs, Fiscal Shifts and Geopolitics
Paying Article

December 18, 2024 1:23 PM UTC

    The U.S. economy’s momentum remains reasonable before the impact of President-elect Trump’s policies in 2025 and 2026.  While high uncertainty exists on the scale and timing of policy, the strategic bias is clear – sizeable tax cuts that will boost the budget deficit; tariffs (threats

December 10, 2024

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Mexico CPI Review: Signs of Disinflation
Paying Article

December 10, 2024 11:04 AM UTC

Mexico’s November CPI rose 0.4%, lowering the Y/Y rate to 4.6% from 4.8% in October. Non-core inflation increased 1.7%, driven by energy costs and seasonal electricity tariff adjustments, while core inflation remained flat, with core goods contracting 0.3%. Key declines occurred in Domestic Goods

December 06, 2024

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Central and Latin America: Country Risk Ratings
Paying Article

December 6, 2024 11:00 AM UTC

We provide country risk reviews for select Central and Latin America countries.  

November 29, 2024

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Banxico Minutes: Evaluating Further Cuts
Paying Article

November 29, 2024 7:31 PM UTC

Banxico’s latest minutes reveal a 25 bps rate cut to 10.25%, with most board members supporting continued easing. They view recent non-core inflation spikes as transitory, expecting headline CPI to decline as shocks dissipate. Core CPI has dropped to 3.8%, reinforcing the case for further cuts, wh

November 22, 2024

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Mexico: Budget Aims at Resuming Fiscal Discipline
Freemium Article

November 22, 2024 11:21 PM UTC

Claudia Sheinbaum’s administration has introduced the 2025 budget, reaffirming Mexico's commitment to fiscal discipline with a projected fiscal consolidation of 2.0% of GDP, reducing the fiscal deficit from 5.9% in 2024 to 3.9% in 2025. Although there is likely an overestimation on GDP growth we b

November 19, 2024

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Brazil and Mexico Labour Productivity: A Headwind for Growth
Freemium Article

November 19, 2024 12:03 PM UTC

Brazil and Mexico labour productivity has been stagnant in the last years, with both countries registering lower labour productivity levels than they were 12 years ago, with the gap with U.S. only widening. With both countries approaching full-employment, measures will need to be taken to foster gro

November 08, 2024

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Mexico CPI Review: Agricultural Goods Drive Inflation Up
Freemium Article

November 8, 2024 2:58 PM UTC

Mexico's CPI rose 0.54% month-over-month in October, with a year-over-year increase to 4.8%, slightly above expectations. Agricultural goods and energy prices were key contributors. Core CPI, showing positive recent trends, rose 0.3% month-over-month and dropped to 3.8% year-over-year. Banxico is ex

November 05, 2024

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Banxico Preview: Continuing to Cut at 25bps Pace
Freemium Article

November 5, 2024 7:45 PM UTC

Mexico's Central Bank (Banxico) is expected to proceed with a 25 basis-point rate cut on Oct. 10, bringing the policy rate to 10.0%. Banxico remains focused on core CPI, which is gradually decreasing toward its 3.0% target. While some previously anticipated a 50 basis-point cut, consensus now favors

October 30, 2024

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Mexico GDP: Demand Sustains Q3 Rebound, but Growth Expected to Slow
Paying Article

October 30, 2024 6:01 PM UTC

Mexico's Q3 GDP grew by 1.0% quarter-over-quarter, beating market expectations, though annual growth slowed to 1.5%. High employment and stronger-than-expected U.S. demand sustained growth, but the outlook remains cautious. Slower growth is expected ahead, with limited structural shifts such as near

October 23, 2024

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Mexico: Economy Contracts in August, Slowdown Continues
Freemium Article

October 23, 2024 6:25 PM UTC

Mexico’s economy contracted by 0.3% in August, with agriculture down 9% and the industrial sector shrinking by 0.5%. Construction dropped 3.6%, and employment growth slowed. Weaker internal demand and stabilizing U.S. demand signal more challenges ahead. Banxico may cut rates further, but subpar g

October 20, 2024

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Mexico: More Institutional Reforms on the Pipeline
Freemium Article

October 20, 2024 3:09 PM UTC

Morena's political dominance has strengthened with Claudia Sheinbaum's election and judicial reforms, allowing them to shape the Supreme Court. This boosts their ability to push controversial policies, like state control of Mexico’s energy sector. However, economic slowdown and potential U.S. poli

October 17, 2024

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Central and Latin America: Country Risk Ratings
Freemium Article

October 17, 2024 10:00 AM UTC

We provide country risk reviews for select Central and Latin America countries.  

September 27, 2024

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Banxico Review: 25bps Cut as Expected, But Not Unanimous
Freemium Article

September 27, 2024 12:58 PM UTC

Banxico cut the policy rate by 25 bps to 10.5%, but the decision was not unanimous, with one dissenter favoring a higher rate. Weak domestic growth and softening core CPI suggest further cuts are likely, though caution is needed due to market volatility. Banxico’s minutes will provide more clarity

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September Outlook: Rate Cuts But How Far?
Paying Article

September 27, 2024 7:44 AM UTC

The 15 chapters of our September Outlook have now been published.  See the headlines and weblinks enclosed for links to the articles on economic, policy and markets for the 23 countries that we cover.

September 26, 2024

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EM FX Outlook: Fed Easing Helps but Divergent Trends
Paying Article

September 26, 2024 8:00 AM UTC

  USD strength is ebbing across the board, which provides a positive force for most EM currencies on a spot basis.  However, where inflation differentials are large, the downward pressure will remain in 2025 e.g. Turkish Lira (TRY).  Where inflation differentials are modest against the U.S., but

September 25, 2024

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Outlook Overview: Rate Cuts But How Far?
Paying Article

September 25, 2024 7:30 AM UTC

·        The U.S. economy is slowing, with the critical question being whether this is a soft or harder landing.  Our broad analysis leaves us inclined to the soft landing view into 2025, though we shall watch real sector data closely over the next 3-6 months to check the trajectory.  Else

September 24, 2024

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LatAm Outlook: Diverging Patterns
Paying Article

September 24, 2024 12:54 PM UTC

·       Brazil and Mexico started to diverge in terms of growth. While we see Brazil GDP growing above 3.0% in 2024 (pushed by the internal demand), we see Mexico’s growth decelerating to 1.3%, due to weaker demand from U.S. and contractionary monetary policy. In 2025, we see Brazil growing

September 15, 2024

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Sep 27 Outlook Webinar: Rate Cuts But How Far?
Paying Article

September 15, 2024 10:30 AM UTC

    Uncertainty about whether the U.S. economy will have a soft or hard landing is growing as the market approaches Q4.  This is shaping the debate regarding the scale of easing through the remainder of 2024 and 2025 by the Fed.  European easing is underway, but how much further will central ba

September 13, 2024

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Mexico: Controversial Judicial Reform is Approved by the Congress
Freemium Article

September 13, 2024 1:39 PM UTC

The Mexican Senate approved a controversial judicial reform proposed by President López Obrador's MORENA party. The reform calls for the election of all 7,000 federal judges, with current judges being dismissed. Supreme Court justices will also be reduced and replaced by elections in 2025. Concerns

September 10, 2024

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Mexico CPI Review: 0% Inflation in August as Expected
Freemium Article

September 10, 2024 1:53 PM UTC

Mexico's CPI remained flat in August, causing year-over-year CPI to drop from 5.6% to 5.0%. This stability was driven by a 0.7% decline in non-core CPI, while core CPI rose 0.2%. The Food and Beverages CPI fell 0.6%, reflecting easing pressure on agricultural goods. With the economy cooling, inflati

September 05, 2024

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Mexico CPI Preview: Stabilization on August
Freemium Article

September 5, 2024 4:39 PM UTC

Mexico’s August CPI is expected to remain flat at 0%, with year-on-year inflation dropping to 5.0% from 5.5% in July, driven by a contraction in non-core CPI. Core CPI is projected to rise by 0.2%, bringing its year-on-year figure to 3.9%. This trend may give Banxico more confidence to resume inte

August 29, 2024

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Mexico: Inflation Report Shows Confidence in Cuts
Paying Article

August 29, 2024 2:08 PM UTC

Banxico's latest report reveals a weaker growth outlook, with a 2024 forecast cut to 1.4% and further weakening expected in 2025. Despite rising non-core CPI, inflation remains controlled. Banxico is likely to continue rate cuts, aiming for a year-end policy rate of 10.25%, amid moderate inflation c

August 23, 2024

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Banxico Minutes: Cuts on the Table, Divided Board
Paying Article

August 23, 2024 1:02 PM UTC

Banxico has resumed its rate-cutting cycle, reducing the policy rate from 11% to 10.75%, with a split board decision. Most members noted weakening domestic activity and external volatility impacting the exchange rate. While some view the rise in non-core inflation as transitory, others see it, along

August 21, 2024

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Mexico: FDI Increases but No Sign of Nearshoring
Paying Article

August 21, 2024 2:50 PM UTC

Mexico's FDI reached USD 31 billion in the first half of 2024, a 7% increase from 2023. However, this figure may be inflated by not accounting for USD inflation, potentially reducing real growth. While nearshoring discussions continue, current FDI largely reflects reinvestment by existing foreign fi

August 16, 2024

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Mexico: Moving Towards Deficit as Expected
Paying Article

August 16, 2024 8:10 PM UTC

Mexico's fiscal situation is becoming challenging, with a primary deficit emerging due to increased support for PEMEX and overestimated growth projections. The Debt/GDP ratio is expected to rise to around 50.8% by 2024, possibly stabilizing around 49-54% depending on fiscal consolidation efforts. Wh

August 14, 2024

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EM Markets Divergence with China Harder Landing Concerns
Paying Article

August 14, 2024 3:35 PM UTC

Global market turbulence has had a spillover impact into EM, but also some EM assets have benefitted from rotation away from the U.S.  What are the prospects in the coming months?
We see scope for a 2nd wave of U.S. equity and Japanese Yen (JPY) correction, which are a mixed influence for EM assets

August 09, 2024

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Banxico Review: 25bps Cut Amid the Risk
Freemium Article

August 9, 2024 1:08 PM UTC

Banxico narrowly voted (3-2) to cut the policy rate by 25bps, despite rising headline inflation and peso depreciation. Core inflation is declining, standing at 4% year-over-year, with expectations of further decreases. Inflation is projected to hit the 3% target by Q4 2025. Future rate decisions wil

August 08, 2024

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Mexico CPI Review: Food Prices Lead the 1% Rise
Freemium Article

August 8, 2024 1:56 PM UTC

Mexico's CPI rose by 1.0% in July, pushing the year-over-year rate to 5.6%, the highest since November 2021. The increase was driven by a 1.9% rise in food and beverages due to drought and exchange rate impacts. Non-core inflation surged by 3.3%, widening the gap with core inflation. Given these ris

August 02, 2024

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Banxico Preview: Inclined to Cut but There Are Risks
Paying Article

August 2, 2024 1:00 PM UTC

The Mexican Central Bank will meet on Aug. 8 to consider a 25 bps rate cut, though risks remain. At 11%, the rate is highly contractionary, impacting job creation and growth. The MXN’s volatility and 10% depreciation since June pose short-term inflation risks, complicating rate cuts. Adverse clima

July 30, 2024

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Mexico GDP Review: Slow Growth in Continues
Paying Article

July 30, 2024 4:22 PM UTC

Mexico's GDP grew by just 0.2% in Q2 2024, with Industry and Services up 0.3% but Agriculture down 1.7%. The economy shows signs of deceleration, especially in agriculture due to extreme climate conditions, despite rising wages. The detailed data is pending, but a slowdown in investment and consumpt

July 25, 2024

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Mexico: Mixed Signs for Banxico
Paying Article

July 25, 2024 1:52 PM UTC

The Mexican economy shows mixed signals for Banxico. Economic activity indicates a slowdown, with weaker industrial activity and decelerating formal employment. However, inflation is rising, particularly in non-core components like energy and agricultural goods, influenced by climate conditions. The

July 17, 2024

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Brazil and Mexico: Supply and Demand Factors Affecting Inflation
Freemium Article

July 17, 2024 6:52 PM UTC

We decomposed inflation in Brazil and Mexico using a Vector Autoregressive (VAR) Model, focusing on Imported Inflation, Demand, Supply, and Monetary Policy. Our analysis from 2003 to 2024 for Brazil and 2005 to 2024 for Mexico shows Brazil's inflation was primarily driven by supply and imported infl

July 12, 2024

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Banxico Minutes: More Slack Could Give Room for Rate Cuts
Paying Article

July 12, 2024 2:43 PM UTC

Banxico kept the policy rate unchanged at 11.0% but showed a slightly dovish tone, hinting at possible cuts in August. June's CPI figures revealed a widening gap between core and non-core inflation. Despite recent economic slowdowns and the MXN Peso's depreciation, Banxico expects economic slack to

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Latin America: Country Risk Ratings
Paying Article

July 12, 2024 10:05 AM UTC

We provide country risk reviews for select Latin America countries including Argentina, Brazil, Chile, Colombia and Mexico. 

July 09, 2024

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Mexico CPI Review: 0.38% Inflation in June
Paying Article

July 9, 2024 7:46 PM UTC

INEGI reports Mexico's CPI rose 0.38% in June, above expectations. Year-over-year CPI increased to 5.0%, with core CPI at 4.1% and non-core CPI at 7.7%. Non-agricultural goods drove the rise, raising concerns about inflation due to climate-related agricultural shocks. Food and beverages saw the high

July 02, 2024

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Webinar Recording June Outlook: Cyclical and Structural Forces
Paying Article

July 2, 2024 7:30 AM UTC

July 01, 2024

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EM After the Elections: Fiscal Focus and Inflation Questions
Paying Article

July 1, 2024 8:05 AM UTC

Enhancing fiscal credibility is key post-election in India and S Africa, but also for Brazil.  India, will do this in the 3 week of July, but S Africa needs to move from ANC/DA led coalition optimism to reality quickly. Brazil needs to stop the vicious circle of sentiment building up on fiscal slip

June 28, 2024

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Banxico Review: Continuing the Pause
Paying Article

June 28, 2024 1:59 PM UTC

The Mexico Central Bank (Banxico) kept the policy rate unchanged at 11.0%, despite one member advocating a 25 basis points cut. Banxico hinted at potential rate cuts in 2024 due to a slowing economy and inflation outlook. An August cut remains possible but seems premature. Market and Banxico inflati