The recent howler of 30y UST auction made yields spike and has served as a reality check for the brief optimism in emerging markets. But we refuese to concede to the negativity – We illustrate the long-term prospects for Latin America in the new deglobalized order below
Bear-steepening paired with cuts left BRL vulnerable
This week our primary focus is the current business cycle, where we try to figure out which stage we are in, and what outlook different asset classes are pricing in. Today’s edition of ‘5 Things We Watch’ is no exception.
We have been bullish on Brazil for months and got the market and timing right. But what about Brazilian stocks? Could they prove to be a buy here?
As a new addition to our editorial, I will now provide a monthly overview of emerging markets, taking a step back from the intricacies and offering a broader perspective. The purpose of this feature is to outline our current positioning within the market cycle and highlight the key factors we are monitoring surrounding EM.
Is Brazil a hideout in the current environment? How will Italy refinance its debt? Is it time for CNY to head lower? Have we seen the top in DAX? And will the banking crisis move to Europe? Find the answers here.
Having commenced this series with a bullish perspective on Brazil, it has now been approximately two months since my initial analysis. As I reassess the situation, I contemplate whether the trade is losing momentum or if there are still untapped profits to be seized.
We suspect both Powell and Lagarde to be content with today’s releases but perhaps the cycle fools everyone again?
While the global macro wheel is heading for a slowdown, could Lula prove to be the least anticipated fiscal hawk given the current state of affairs?