Bovespa drop, Copom to cut, mixed growth in the Andes

Brazil's Bovespa equity index has had a tough week and we think that Brazilian stocks will underperform their EM peers over the remainder of this year. The activity data out of Brazil have also been disappointing, and strengthen the case for another 25bp rate cut at Copom's next meeting in September. Elsewhere, GDP data from the Andes due out next Tuesday are likely to show that growth in Colombia was very strong in Q2 while Chile's economy continued to struggle.