Voters head to the polls in Peru and Ecuador on Sunday which could lead to a populist shift in both countries. In the former, political risks may have a growing adverse impact on the economy and financial markets, while in the latter populism could hasten a move towards another sovereign default. Otherwise, the minutes to Banxico’s last meeting support our relatively dovish view on monetary policy. Finally, rising virus cases across Latin America suggest that the outlook for Q2 is getting worse by the day but, in Chile, we are cautiously optimistic that the rapid vaccination campaign will drive a strong recovery later in the year. We will be discussing this at a Drop-In webinar on Monday (sign up here).
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