March Outlook: Navigating the Turbulence

March 27, 2025 10:30 AM UTC

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

LatAm Outlook: Navigating the Uncertainty

March 26, 2025 9:56 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 institutional reforms and its close ties with U.S. increases uncertainty for 2025, especially after Trump victory, and the menaces of Trump imposing tar

Outlook Overview: Navigating the Turbulence

March 26, 2025 9:30 AM UTC

·       More tariffs will arrive from the U.S. from April with product (car, pharma, semiconductors and lumber) and reciprocal tariffs. President Trump has a 3-part approach to tariffs to raise (tax) revenue; bring production back to the U.S. and get fairer trade deals.  This means some of t

Equities Outlook: Turbulence Ahead

March 26, 2025 9:05 AM UTC

·       U.S. trade wars will likely hurt U.S. growth and raise inflation, with only small to modest Fed easing and a 10yr budget bill that will likely be neutral to negative for the economy.  With valuations still very high (Figure 1), we see scope for a correction to extend into mid-year th

BCB Minutes: Caution Rather than Optimism

March 25, 2025 10:51 PM UTC

The Brazilian Central Bank (BCB) raised the policy rate by 100bps to 14.25% amid signs of economic deceleration, including slower growth, job creation, and consumption. The BCB highlighted external uncertainties, such as U.S. trade policy, and domestic challenges with rising inflation. It emphasized

BCB Review: Confirming More Hikes

March 19, 2025 10:38 PM UTC

The Brazilian Central Bank (BCB) raised the policy rate by 100 bps to 14.25% and signaled further hikes, likely reaching 15.0% by May, potentially ending the current tightening cycle. The BCB emphasized inflation concerns and strong economic activity, suggesting a hawkish stance. Fiscal policy was n

Brazil CPI Review: 1.3% Monthly Growth, with Seasonal Impacts

March 12, 2025 10:43 PM UTC

Brazil's February CPI increased by 1.3%, the highest in 22 years, largely driven by the removal of subsidized electricity bills, which boosted Housing by 4.4%. The year-over-year inflation rose to 5.1%, above the BCB's target. Key contributors included Education (up 4.4%) and Food and Beverages (up

Argentina: Fresh IMF Deal on the Pipeline

March 12, 2025 12:00 AM UTC

The Argentine government has issued an emergency decree to authorize a new IMF deal, potentially worth USD 20 billion, to pay off Treasury debt to the Central Bank. This deal includes a 4-year grace period and 10-year repayment terms. The government aims to stabilize reserves, delay debt amortizatio

Brazil GDP: 3.4% Growth in 2024, but Deceleration in Q4

March 7, 2025 10:03 PM UTC

Brazil’s economy grew 3.4% in 2024, exceeding forecasts of 1.6%, with a 0.2% growth in Q4, reflecting a significant slowdown from Q3’s 0.9%. Key sectors like agriculture contracted, while industry and services showed modest growth. Investment and government consumption were the main drivers, tho

Mexico: Uncertainty Mounts as Tariffs Are Imposed

March 5, 2025 2:43 PM UTC

Trump's administration has moved forward with 25% tariffs on Mexican imports, citing drug trafficking and migration issues. Mexico’s President Sheinbaum has stated retaliatory measures will be announced on March 9. The tariffs could push Mexico into recession in 2025, although we forecast growth a

Central and Latin America: Country Risk Ratings

March 5, 2025 11:00 AM UTC

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

Mexico: Labour Market Decelerating as Expected

February 28, 2025 5:53 PM UTC

Mexico's labor market remains strong with an unemployment rate of 2.7%, but signs of deceleration are emerging. Worker affiliation to the pension system and wage growth are slowing, and some job creation stagnation is expected, potentially pushing the unemployment rate above 3%. A technical recessio

Brazil: Some Deceleration on Labour Markets, But Still Strong

February 27, 2025 7:53 PM UTC

Brazil's labor data through January indicates a slight deceleration in job creation, with annual net formal job growth at 1.6 million, above the 1.4 million registered in July 2023. While the unemployment rate rose slightly to 6.5%, it remains lower than January 2024. Admission salaries are growing

Argentina: Recovery Complete?

February 27, 2025 2:32 PM UTC

Argentina’s economy showed signs of recovery in December, growing 0.5% m/m and 1.2% q/q in Q4, with a 4.7% annual increase. The banking and trade sectors saw strong growth, but construction and industry stagnated. Despite progress, challenges remain, including inflation above 2%, a current account

Banxico Minutes: More Cuts on the Way

February 21, 2025 9:57 PM UTC

Banxico cut the policy rate by 50 bps to 9.5%, signaling a more dovish stance as inflation trends downward. The board cited weak domestic demand and improved inflation prospects but highlighted risks from U.S. policy uncertainty, tariffs, and immigration effects. While most members supported a 50 bp

Argentina: Primary Surpluses Continues

February 20, 2025 6:18 PM UTC

Argentina’s fiscal anchor under Milei remains the key stabilizer, with inflation gradually declining and the crawling peg rate cut to 1% monthly. A primary surplus of USD 8 billion was achieved in 2024 through spending cuts, while capital controls and IMF support help manage low reserves. For 2025

Mexico: Tariffs and Growth Issues Could Impose Fiscal Difficulties

February 19, 2025 10:20 PM UTC

Mexico aims for fiscal consolidation in 2025, relying on revenue growth while freezing most expenditures. However, weak growth could undermine this strategy. Authorities expect 2–3% GDP growth, but our forecast is 1.6%, with a recession risk. A less integrated U.S.-Mexico trade relationship, parti

Brazil: Activity Strong in Q4 but Some Marginal Deceleration

February 18, 2025 10:04 PM UTC

We see Brazilian economy growing 1.0% in Q4 and is expected to expand 3.6% in 2024, surpassing initial forecasts. However, monthly data shows signs of weakness, with contractions in services, industry, and retail trade in in December. Despite tight monetary policy (13.25%), the expected slowdown has

Argentina CPI Review: January Relief but Inflation Fight Continues

February 14, 2025 7:05 PM UTC

Argentina’s CPI rose 2.2% in January, slightly below forecasts, with Y/Y inflation dropping to 84% from 116%. Core CPI increased by 2.4%, accumulating 75% annual inflation. Inflation is expected to decline as devaluation effects fade, though inertia may keep it above 2% in the first half. Services

Brazil CPI Review: Mixed Signs from January Inflation

February 12, 2025 12:33 AM UTC

Brazil’s CPI rose 0.16% in January, lowering Y/Y inflation to 4.5% from 4.8%. A temporary electricity discount drove the decline, while Food (+1%) and Transport (+1.3%) showed worrying increases. Core inflation rose 0.7%, with Services CPI jumping to 5.4%, partly due to seasonal healthcare costs.

Mexico CPI Review: Inflation Falls as Demand Eases

February 10, 2025 7:14 PM UTC

Mexico’s CPI rose 0.3% in January, below its 0.6% historical average but in line with expectations. Y/Y inflation fell to 3.6%, the lowest since Jan/2021. Core CPI rose 0.4%, with core goods up 0.7% and services up 0.2%. Non-core CPI fell 0.13%, led by a 1.5% drop in agricultural goods. The econom

Banxico Review: 50 bps Cut as Expected

February 8, 2025 9:39 PM UTC

Banxico cut the policy rate by 50bps to 10.5%, with a cautious stance and a split vote. Inflation has fallen but remains above target, expected to converge to 3.0% by Q3 2026. Global risks, including Trump’s tariff threats, add uncertainty. Despite economic weakness, some monetary tightening may s

Argentina: Lower Rates, Conditions to Lift the Controls

February 6, 2025 6:16 PM UTC

The Argentine Central Bank cut rates to 29%, citing improved inflation expectations. Rather than using a contractionary policy, it aims to curb monetary base growth through fiscal consolidation. Inflation is below 3%, with a 2% target feasible by mid-year. However, the 1% crawling peg risks eroding

BCB Minutes: Detailing the Deterioration

February 4, 2025 6:29 PM UTC

The BCB raised rates by 100bps to 13.25%, signaling another hike in March. External uncertainty remains, but domestic risks worsened, with inflation expectations rising. The BCB stressed fiscal-monetary coordination and warned about policy distortions. Despite markets pricing a 15% rate, we expect s

Mexico GDP Review: 0.6% Contraction in Q4 and Recession Risks

January 31, 2025 6:34 PM UTC

Mexico’s GDP shrank by 0.6% in Q4 2024, bringing annual growth to 1.5%, well below previous years. The industrial sector led the decline, driven by uncertainty over Trump’s election and weaker investment, while agriculture also contracted sharply. Monetary tightening, lower U.S. demand, and poli

BCB Review: Maintaining the Course

January 30, 2025 6:09 PM UTC

The Brazilian Central Bank (BCB) raised the policy rate by 100bps to 13.25%, signaling another hike in March while monitoring economic data. The statement had a neutral-to-dovish tone, with inflation risks stemming from services CPI, unanchored expectations, and fiscal policy. Market projections see

BCB Preview: 100bps Hike Will Buy Some Time

January 27, 2025 7:09 PM UTC

The Brazilian Central Bank is expected to maintain its course with two 100bps hikes, reaching 14.25% by March. Inflation forecasts for 2025 exceed the target, necessitating a firm policy stance. Despite market concerns, new President Gabriel Galípoli is likely to act decisively. The Real’s recent

Brazil: Some Deceleration in Services

January 24, 2025 4:48 PM UTC

The Brazilian economy grew over 3% in 2024 despite tight monetary policy. While services (-0.9% m/m), industry, and retail sales weakened in November, agricultural exports and fiscal stimulus boosted overall activity. The Central Bank Activity Index showed marginal growth (0.1%) in October and Novem

Argentina: Adjusting the Anchor

January 22, 2025 2:40 PM UTC

Argentina is refining its monetary framework as inflation stabilizes below 3.0% (m/m), marking progress after double-digit levels. Key measures include halting Peso issuance, fiscal adjustments, sterilization to stabilize the monetary base, and diminishing the pace of depreciation of the official ex

Brazil: Fiscal Target will be Fulfilled but Doubts Remains over the Fiscal Sustainability

January 16, 2025 3:08 PM UTC

Brazil achieved significant fiscal consolidation in 2024, with a primary deficit of 0.6% of GDP, or 0.2% excluding flood-related costs, driven by revenue growth and reduced judicial expenditures. However, rising debt servicing costs, now at 8% of GDP, worsen the nominal result. Fiscal discipline wil

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

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

Brazil CPI Review: Some Deterioration in December

January 13, 2025 2:28 PM UTC

Brazil’s CPI grew by 0.52% in December, ending 2024 at 4.8%, above the Central Bank’s target range (1.5%–4.5%). Key drivers included food (+1.2% m/m) and household spending (+0.7%). Core inflation rose for the fourth consecutive month, reaching 4.3% Y/Y. Elevated inflation is expected in early

Cyberattacks and AI Misinformation: Market and Economic Fallout

January 13, 2025 8:10 AM UTC

   A major cyberattack is a tail risk, while a huge AI misinformation crisis is a modest crisis in our view.  Russia/China and Iran are less likely to launch a state sponsored cyberattack for geopolitical reasons and also uncertainty over president elect Donald Trump’s response.  A huge AI mis

Mexico CPI Review: Downtrend Continues

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

Mexico CPI Preview: Christmas Acceleration

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

Markets 2025: A Tale of Two Halves

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

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

December 30, 2024 8:05 AM UTC

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

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

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

December 20, 2024 12:15 PM UTC

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

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

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

LatAm Outlook: Economic Shifts

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

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

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

Equities Outlook: U.S. Exceptionalism v Valuations

December 18, 2024 10:05 AM UTC

·        The glory days of exceptionalism for U.S. equities will likely extend in Q1 2025 to bring the S&P500 to 6200-6300. The problem is that valuations have now become stretched with S&P500 ex magnificent 7 on a forward P/E of 19 and valuations out of line with real bond yields (Figure 1)

BCB Review: Shock 100bps Hike

December 12, 2024 10:12 AM UTC

The Brazilian Central Bank raised the policy rate by 100bps to 12.25%, with plans for two more 100bps hikes, reaching 14.25% by early 2025—the highest in 18 years. The decision reflects fiscal concerns, inflation risks, and a 10% depreciation of the Real. The BCB aims to curb inflation and protect

Mexico CPI Review: Signs of Disinflation

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

Central and Latin America: Country Risk Ratings

December 6, 2024 11:00 AM UTC

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

Brazil GDP Review: Economy Continues Resilient

December 4, 2024 12:50 AM UTC

Brazil’s Q3 GDP grew by 0.9% (q/q) and 4.0% year-over-year, driven by gains in Services (+0.9%) and Industry (+0.6%), which offset a 1.4% drop in Agriculture. Household Consumption (+1.5%) and Investments (+2.1%) were key growth drivers, supported by domestic demand. Despite an unemployment rate o

Banxico Minutes: Evaluating Further Cuts

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

Brazil: Timid Fiscal Package Presented

November 28, 2024 2:01 PM UTC

Brazil's Finance Minister Fernando Haddad introduced a fiscal package to improve the country's fiscal position without direct budget cuts. Key changes include adjusting the minimum wage growth to align with a new framework limiting expenditures to a maximum of 2.5% in real terms. Other measures rest