Protests in Ecuador, soft Latam inflation

Intensifying anti-austerity protests in Ecuador have threatened the government’s reform agenda and caused bond spreads to widen this week. But even if the government does water down its fiscal plans, we think it’s most likely that spreads will narrow before too long. Elsewhere, soft inflation figures out of Brazil and Mexico this week support our view that another 50bp of rate cuts are likely in each country by the end of the year.