Panama Canal, Brazil’s fiscal framework, Ecuador’s vote

Panama's economy will bear the brunt of the disruption at the Panama Canal caused by a severe drought. But given the Canal's importance to global trade, there are also likely to be global implications – in particular in the form of higher shipping prices between parts of Asia and the US. The crumb of comfort is that global supply chains are not nearly as stretched as they were when the Ever Given container ship blocked the Suez Canal in 2021. Elsewhere, although Brazil's congress approved the new fiscal framework this week, we still think it's more likely than not that Brazil's public debt will return to an upwards path. Finally, Ecuador's presidential election will go to a run-off in October and whoever wins faces an uphill task in avoiding another default.