20180611-法国巴黎银行-Latin_America_Week_Ahead_9页_269kb

Summary of Latin America Weekly Market Economics - 11-16 June 2018

Core Content Overview

This document provides a weekly market outlook for Latin America, focusing on key economic events and policy developments across Brazil, Mexico, Argentina, Colombia, and Chile. It includes analysis of economic data, political developments, and central bank policy expectations.

Key Events and Highlights

Brazil

• Election Poll Result: A Datafolha poll is expected to be released over the weekend, likely setting the tone for local markets.
• Economic Data:
  • Retail sales are forecasted to grow by +0.5% m/m and +7.0% y/y.
  • April's GDP proxy (IBC-Br) is expected to show a positive print, reinforcing the trend of economic recovery.
  • Consumer price inflation (CPI) is projected to remain high at 2.5% m/m and 26.8% y/y for May.
• Industrial Production (IP): Expected to remain flat on the month, with a slight contraction of -0.5% y/y for April.

Mexico

• Presidential Election: The last TV debate before the 1 July election will take place on Tuesday.
• Trade and Reforms: NAFTA negotiations are stalled, and the US tariffs are unlikely to have a major impact on inflation.
• Economic Data:
  • Industrial production for April is expected to grow by 4.5% y/y, following a dip in March due to Easter.
  • Industrial production y/y is forecasted at -0.5% for April.
• Political Outlook: AMLO's coalition is expected to gain more seats than anticipated, but may still not be enough to reverse structural reforms.

Argentina

• IMF Loan: The new IMF loan is seen as a boost to investor confidence and credibility.
• Central Bank (BCRA): Expected to keep interest rates on hold for now due to high inflation expectations and FX market stability.
• Inflation: May's CPI is projected to be 2.5% m/m, lifting the annual rate to 26.8%. Core inflation is likely to accelerate.
• Economic Outlook: Inflation is forecasted to rise to 28% by year-end and moderate to 20% in 2019 as economic activity cools.

Colombia

• Elections: The second round of the presidential election will be held on 17 June.
• Economic Data:
  • April's retail sales are expected to rise by 2.8% y/y, supported by calendar effects.
  • April's industrial production is forecasted to increase by 3.2% y/y.
• GDP Outlook: 2018 GDP growth is expected to be 2.5% y/y, accelerating to 3.5% in 2019.
• Webcast: A webcast will be hosted on 13 June to preview the second-round election and its implications.

Chile

• Central Bank (BCCh): Expected to keep interest rates on hold, with the underlying trend of economic activity improving.
• Inflation: Recent data has shown a surprise increase in consumer price inflation.
• Policy Outlook: Rate hikes are expected in Q3 2018, with the policy rate likely to reach 3% by year-end.
• Economists Survey: The monthly survey of economists is scheduled for Tuesday, possibly influencing rate expectations.

Economic Calendar Highlights

Main Viewpoints

• Economic Recovery: There is a general expectation of economic recovery across the region, though with varying degrees of strength and uncertainty.
• Inflation: High inflation is a persistent concern, especially in Argentina and Brazil, with potential for further acceleration in the second half of 2018.
• Central Bank Policies: Most central banks are expected to maintain or tighten monetary policy in the near term, with rate cuts possibly coming in Q4 2018 for Argentina and Brazil.
• Political Impact: Elections are a key focus, particularly in Mexico and Colombia, with potential implications for economic policy and market sentiment.

Key Information

• The IMF loan to Argentina is the largest in the Fund's history, but the details remain uncertain.
• The OECD accession by Colombia is attributed to improved transparency and governance.
• Mexico's industrial production is expected to rebound in April, but overall economic data is mixed.
• Chile is expected to maintain interest rates, with potential for rate hikes in Q3 2018.
• The second round of the Colombian presidential election is set for 17 June, with polls favoring Iván Duque.
• A webcast is scheduled for 13 June to discuss the implications of the election outcomes.