This month’s data have brought fresh signs that the region’s recovery, which has so far been pretty impressive, is starting to lose some of its steam. Brazilian industrial production stagnated in monthon- month terms in May and April’s decline was revised higher. To compound matters, it seems that the country’s consumer boom, which has formed the bedrock of its recovery to date, stalled in Q2. Elsewhere, the recovery in Mexican manufacturing is starting to fade and even Peru’s red-hot recovery is showing tentative signs of slowing. Of course, one or two month’s figures do not make a trend, but it does seem that our long-held view that growth in the region would fade over the second half of this year is starting to be borne out in the data. We expect this to continue into 2011, particularly if commodity prices start to fall. With the exception of Venezuela, which remains mired in recession, and Argentina, which is still suffering from a toxic mix of super-loose policy, runaway inflation and a fixed exchange rate, a gentle slowdown remains more likely than a complete collapse. But we still suspect that the most bullish forecasts for 2011 will prove too optimistic.