Chile’s communist candidate, Mexico’s weak economy

The victory for communist candidate, Jeannette Jara, in the Chilean governing coalition’s presidential primary election was received warmly by markets – her presence on the ballot is seen as bolstering the chances for right-wing candidates in November's general election. But her win also raises the risk of a shift further left than that seen under incumbent President Boric. Elsewhere, the raft of weak data out of Mexico this week support our downbeat growth view and our below-consensus interest rate forecast. The clouds over Mexico’s economy may start to lift when USMCA renegotiations get underway. Vietnam’s trade agreement with the US this week reinforces the idea that keeping China out of North American supply chains will be a big part of talks.