1. We begin with emerging markets where the declines in Argentina’s economic activity have accelerated. The timing of this turn of events is quite unfortunate because the new government has a limited “honeymoon” window to enact the necessary reforms.
On the other hand, Argentina’s trade balance seems to have stabilized – in part as a result of the peso weakness.
2. We see more “green shoots” in Brazil where consumer confidence, though extremely weak, is gradually recovering. There are more signs that Brazil’s inflationary pressures are easing, which should result in rate cuts by the nation’s central bank.
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