Scenario Analysis

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March 25, 2024

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Outlook Overview: Europe in Focus, Then Elections Around the World
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March 25, 2024 11:15 AM UTC

March 22, 2024

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DM Rates Outlook: Rate Cuts Arriving and Positive Yield Curves
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March 22, 2024 2:00 PM UTC

December 18, 2023

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Outlook Overview: Rate Cuts Into 2024
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December 18, 2023 3:42 PM UTC

·     Uncertainty still prevails around this central view.  The impact of lagged monetary tightening could be greater than our estimates and deliver mild recessions in some DM countries.  We also feel that the disinflationary process could be stronger and this would help bring inflation back

December 15, 2023

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DM Rates Outlook: Front End Favored
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December 15, 2023 10:19 AM UTC

•    EZ debt yields will also see a swing back towards a positive shaped yield curve.  Gradual ECB rate cuts will translate into a persistent decline in 2yr yields in 2024, but slower in 2025 as the market will be uncertain about the terminal policy rate and the ECB forward guidance will like

November 29, 2023

Brazil: The 0% Deficit Tale is About to be Forgotten
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November 29, 2023 7:47 PM UTC

When Finance Minister Fernando Haddad unveiled the New Fiscal Framework, capping expenditure growth at 70% of revenue growth, he anticipated a sustained increase in revenue in line with the rates observed in 2021 and 2022. The objective was to keep expenditures below revenues, ensuring fiscal adjust

November 24, 2023

LatAm: Long Term Growth Differences
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November 24, 2023 11:52 AM UTC

We see different patterns of growth for the Latin American countries. Brazil, Mexico and Argentina have different types of constraints that will define their long-term growth.
Figure 1: Annual GDP Growth
Source: Continuum Economics. *forecasts
We observe that the long-term growth trajectory for Brazil

September 07, 2023

Brazil: Drop on Revenues Leads to Fiscal Deterioration
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September 7, 2023 1:47 PM UTC

Figure 1: Primary Expenditures and Revenues (% of the GDP, 12-months sum)
Source: STN and BCB
The fiscal situation in Brazil has recently deteriorated significantly. In 2022, the country boasted a 0.6% primary surplus, but by July, this figure had plummeted to a 0.9% deficit. This alarming shift can

August 04, 2023

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Ukraine War: Stalemate and Frozen Conflict or Prolonged War?
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August 4, 2023 10:59 AM UTC

Market Implications: The war continues to create an increasing financial burden on Russia due to high military spending in addition to aggravation of staff shortages, elevated inflation, and risks posed by the sanctions. Ukraine’s economy continues to contract, inflation surges and exports decreas

July 18, 2023

FOMC Preview: 25bps Tightening, Scenarios Looking Ahead
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July 18, 2023 3:29 PM UTC

No shocks from the decision, or the statement
At the last meeting, on June 14, the FOMC left rates unchanged for the first time since tightening started in March 2022. This was despite employment and inflation data between that meeting and the previous one on March 22 having surprised to the upside.

May 30, 2023

Brazil: Reindustrialization through Subsidies
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May 30, 2023 1:11 PM UTC

Figure 1: Industry Participation on the GDP
Source: IBGE and Continuum Economics
The Brazilian government recently introduced a set of measures aimed at revitalizing the automotive sector. These measures primarily involve offering subsidies for car production, with a focus on reducing federal taxes to

May 23, 2023

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Brazil: Petrobras Changes its Fuel Price Policy. Who Pays for it?

May 23, 2023 2:09 PM UTC

Figure 1: Petrobras Distribution Prices, International oil Prices and Gasoline CPI (Aug-2019 = 100)
Source: Petrobras, IBGE and Datastream
Petrobras has recently announced a significant change to its fuel pricing policy. Since 2016, the state-owned company had been following a practice of aligning its

May 18, 2023

Brazil: Activity Data Paints a Bleak Picture
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May 18, 2023 1:40 PM UTC

Figure 1: Activity Indicators (2019 = 100, Seasonally Adjusted)
Source: IBGE
The major activity indicators in Brazil, including the industrial production Index, services volume, and retail trade, suggest that the country's economic activity is expected to remain close to a stagnant state. While these

April 20, 2023

Brazil: Fiscal Framework Sent to Congress
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April 20, 2023 4:19 PM UTC

The Brazilian Government has sent to the Congress the final text of the New Fiscal Framework (here). The measure would restrict the growth to 70% for Revenue Growth, set bands for the primary target and in case the primary target is above the stipulated, the government could use the extra revenues t

March 30, 2023

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Brazil: New Fiscal Framework Revealed
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March 30, 2023 8:18 PM UTC

Figure 1: Fiscal Result Target (% of GDP)
Source: Ministerio da Fazenda
Brazil’s Finance Minister Mr. Fernando Haddad has revealed in a press conference the new fiscal framework which will substitute the Expenditure Ceiling Rule. The new rule will be more flexible than the Expenditure Ceiling but st

March 21, 2023

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War in Ukraine: Turning to Stalemate
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March 21, 2023 2:58 PM UTC

Figure 1: Possible Scenarios
Source: Continuum Economics.(1) Other scenarios would be a remaining 10% including a double cold war with China and Russia versus the west; Putin stepping down or dying or a successful Ukraine counter offensive that reclaims a fair portion of lost territory.
No Russian Maj

August 30, 2022

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Global Scenarios and Heat Map: Q3 2022 Update
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August 30, 2022 11:09 AM UTC

Figure 1: Scenario Assumptions for the Next 12 Months
Source: Continuum Economics
Figure 2: Scenarios and Heat Map for Major Asset Classes over the Next 12 Months
Source: Continuum Economics
Our forecast of weaker growth is appearing in major economies, with clear slowdown phases in the U.S./EZ and Chin

July 22, 2022

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Ukraine War Scenarios: Long war, Exhaustion or Cyberattack
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July 22, 2022 12:58 PM UTC

Figure 1: Possible Scenarios
Source: Continuum Economics.(1) Other scenarios would be a remaining 10% including a double cold war with China and Russia versus the west; Putin stepping down or dying or a successful Ukraine counter offensive that reclaims a fair portion of lost territory.
2 Main Scenari

June 29, 2022

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Central Bank Response to $160 WTI Cuts Growth
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June 29, 2022 9:23 AM UTC

Figure 1: Higher Oil Prices Mean Slower GDP Growth in US, EZ and China Relative to Baseline
Source: Continuum Economics, NiGEM
Baseline
Our baseline view for WTI oil prices for end-2022 is $130 and $110 for end-2023. Our baseline view includes disruption from the ongoing war in Ukraine, which we expect