We do not expect Argentina’s default to trigger a prolonged ripple of contagion in the rest of Latin America. There may be some turbulence in the region’s financial markets, but we suspect that the actions of the Fed will continue to have a much larger bearing on risk appetite. Meanwhile, on the economic front, Brazil and Uruguay stand to lose the most from weaker Argentine growth. The aggregate impact will probably be small, although manufacturers may suffer more than most.
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