The most likely outcome from the US election – a Biden win alongside a divided Senate – is arguably the best possible result for Latin America. Mexico will probably face a less antagonistic trading partner while Biden’s climate change agenda, which had presented a threat to the outlook for the region’s oil producers, is likely to be watered down. Meanwhile, although the case is strengthening for Brazil’s central bank to turn hawkish, we disagree with investors that it will embark on an aggressive tightening cycle next year.
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