Argentina reprofiling, Brazilian beef & Mexico rates

Argentina’s government has postponed the payment of around $9bn on Treasury bills until August 2020, reaffirming our view that a restructuring of local-law debts was on the cards. However, maturity extensions will do little to help the underlying debt problem, nor will the government’s fiscal plans currently going through the Senate. Elsewhere, we have revised up our 2020 inflation forecast for Brazil following the recent spike in beef prices. Finally, the more hawkish statement by Mexico’s central bank after it cut its policy rate by 25bp yesterday supports our view that interest rates will not fall as far as most analysts expect next year.