Lat Am markets suffer more than most in latest EM sell-off

Markets in Latin America have been hit particularly hard in the latest EM sell-off. A combination of factors has been responsible, including falling commodity prices and a renewed focus on the likely effects of policy tightening by the Fed. But in the case of Brazil, which has suffered some of the largest falls in the stock market and currency, fading optimism that this weekend’s election might deliver much-needed reforms has also played a role. We’re nudging down our forecasts for several currencies in the region, including the Brazilian real and Chilean peso.