Latin America Economics Update Assessing the impact of low oil prices on Mexico The plunge in oil prices is yet another drag on Mexico’s freefalling economy, and may hasten a move by Pemex to restructure its external debts. The government’s lacklustre response to the economic... 22nd April 2020 · 3 mins read
Latin America Economics Update Pemex default risks rising Our oil price forecasts are consistent with a 30% drop in Pemex’s revenues this year, which suggests the firm will need additional state support to service its large debts. However, with the... 16th April 2020 · 5 mins read
Latin America Data Response Mexico Consumer Prices (Mar.) The larger-than-expected fall in Mexican inflation in March, to 3.3% y/y, should ease near-term concerns at the central bank about the impact of the fall in the peso on prices. More importantly, with... 7th April 2020 · 2 mins read
Latin America Economics Update What do the latest surveys tell us? Last month’s survey data for Brazil and Mexico don’t capture most of the impact of the ramping up of social distancing measures in the second half of March, but they still suggest that both economies... 2nd April 2020 · 2 mins read
Latin America Economics Update Is Mexico sleepwalking into a crisis? Mexico’s economy is likely to suffer a similar fall in output this year as it did during the Tequila Crisis and the Global Financial Crisis. Despite its reticence, the government will ultimately have... 25th March 2020 · 4 mins read
Latin America Data Response Mexico Bi-Weekly CPI (Mar.) Despite Mexican inflation remaining above target in early March, we think that Banxico will follow up its emergency 50bp rate cut last week with around 200bp of further easing in the coming quarters. 24th March 2020 · 2 mins read
Emerging Markets Economics Update Are we facing a re-run of the 2014-16 oil price crash? The recent oil price shock has invoked comparisons with 2014-16, when prices fell to similarly low levels and large EMs – notably Brazil and Russia – entered crises. But this time around, we think... 11th March 2020 · 3 mins read
Latin America Data Response Mexico Consumer Prices (Feb.) Given rising inflation and the sharp fall in the peso, we no longer think that the Bank of Mexico will cut its key rate this month in line with the Fed. Policymakers will probably leave rates on hold. 9th March 2020 · 2 mins read
Emerging Markets Economics Update Coronavirus to trigger more widespread EM rate cuts The continued spread of the coronavirus and the Fed’s emergency rate cut will result in more aggressive loosening in EMs than we previously envisaged. We expect central banks in much of Emerging Asia... 4th March 2020 · 3 mins read
Latin America Data Response Mexico Bi-Weekly CPI (Feb.) Stronger headline inflation in early February was mostly due to food prices; core inflation remained stable. Even so, we think that the persistence of above-target inflation will limit policymakers to... 24th February 2020 · 2 mins read
Latin America Data Response Mexico Industrial Production (Dec.) Mexico’s industrial sectors weakened again in December, capping a poor year and creating a weak starting point for 2020. The available surveys suggest that conditions remained difficult more recently. 11th February 2020 · 2 mins read
Latin America Data Response Brazil & Mexico CPI (Jan.) The rise in Mexican inflation from 2.8% y/y in December to 3.2% y/y in January supports our view that, while the central bank will cut interest rates further, the easing cycle won’t go as far as... 7th February 2020 · 2 mins read
Latin America Economics Update Mexico: Flat again Mexico dodged another technical recession in Q4, we think that the weakness seen in the later months of last year will persist into 2020, causing growth to fall far below consensus expectations. 30th January 2020 · 2 mins read
Latin America Data Response Brazil & Mexico Bi-Weekly CPI (Jan.) The above-target Brazilian inflation reading for the middle of January reduces the chance of an interest rate cut next month. Mexican inflation also rose, supporting our expectation of a short easing... 23rd January 2020 · 2 mins read
Latin America Data Response Brazil IPCA (Dec.) & Mexico Ind. Production (Nov.) Strong Brazilian inflation – which jumped to 4.3% y/y last month – and signs that the economy is on a firmer footing, suggest that the further interest rate cuts some still expect in early 2020 won’t... 10th January 2020 · 2 mins read
Latin America Data Response Mexico CPI (Dec.) & Brazil Ind. Production (Nov.) Mexican inflation eased again in December, supporting our view that policymakers will continue to cut rates this year. Elsewhere, the larger-than-expected 1.2% m/m fall in Brazilian industrial... 9th January 2020 · 2 mins read
