Itaú BBA - Global Scenario Review

  • Amid the recovery, commodities sustain emerging market assets, but looming US inflation is a risk  

    Global recovery continues and sustains commodity prices and emerging market assets, but US inflation brings risks

  • A wider DM-EM divide   

    Growth scenario improves in Europe with advances in vaccination. The situation in emerging market economies remains more challenging.

  • Macro Scenario – Global: U.S. powering ahead, EU resilient, EMs still struggling  

    New infrastructure package in the U.S. will lead to higher growth over the next few years.

  • Macro Scenario – Global: Recovery leads to higher yields   

    The economic normalization will likely continue to put pressure on US (and global) yields

  • Macro Scenario – Global: Vaccines to support global growth; Fed to act sooner than markets expect  

    We now expect U.S. GDP to grow 6.7% (from 5.5%) in 2021 due to a higher fiscal boost. The Fed is set to hike rates in 1Q23.

  • Macro Scenario – Global: Vaccination to allow global recovery  

    COVID-19 vaccine programs started slowly but are gathering speed and will allow an economic recovery in major economies.

  • Global outlook continues to improve  

    Global scenario points to a weak dollar and more inflows to emerging markets. In Brazil, the spending ceiling will be met in coming years.

  • Signs of progress, amidst short-run challenges  

    Progress in vaccine development worldwide is a positive sign, but short-term challenges remain.

  • The recovery lingers on  

    Global recovery on track, despite increased risks in the short term. In Brazil, the recovery continues, but fiscal impasse is a risk.

  • Shifting global risks  

    The global recovery continues, while U.S. election risk is on the rise. In Brazil, the high uncertainty on the fiscal outlook remains.

  • The end of a strong-dollar cycle  

    The global recovery continues, while in Brazil fiscal risks remain high.

  • One step closer to 'normality'?  

    Despite the risk of new outbreaks, the global economy continues to recover. In Brazil, economic activity may have reached a floor in April.

  • Green shoots in the global economy  

    With signs of a slowdown in the covid-19 outbreak, economies are starting to recover.

  • Slower, with more risks  

    Given our new growth outlook for the U.S., Eurozone and LatAm, we revised our global GDP forecast to -3.2% in 2020.

  • Global recession and its consequences  

    Given the evolution of the coronavirus outbreak, we lowered our global growth forecasts, as well as for the US, Europe, China and LatAm.

  • Special: Global contagion and its consequences  

    This special scenario review stems from the evolution of coronavirus on a global scale, which may lead the world to recession in 2020.

  • Cushioning the fall  

    Economic policy responses may mitigate financial tightening given the global outbreak of the coronavirus, but downside risks remain high.

  • A new challenge for global growth  

    Coronavirus increases uncertainty for global economic activity. In Brazil, the Central bank interrupts the easing cycle.

  • Fewer global headwinds early in 2020  

    Lower risks will likely lead to higher growth this year

  • New risks in the new year  

    Old risks (tariffs, Brexit) are fading, but others arise.

  • Signs of improvement in the global economy  

    Trade tensions between the US and China are de-escalating, but Latin American countries will have to deal with their idiosyncratic risks.

  • Rates edge even lower in LatAm  

    Interest rates are expected to become even lower in Latin America. In Brazil, we now expect the Selic rate to fall to 4% in the end of 2020

  • Trying to stop the deceleration tide  

    Policymakers seem to be responding to deceleration signs, but so far without being able to completely mitigate risks.

  • Back to conflict mode  

    The new round of U.S.-China tariffs will put more pressure on global growth, pushing further central banks around the globe into easing stances.

  • A ceasefire, not a peace deal  

    Trade truce brings some relief, but central banks are still set to cut rates. In Brazil, we expect the BCB to cut 50 bps at the end of July.

  • Trade war: From bad to worse  

    The increasing trade tensions between U.S. and China is likely to weigh further on global growth.

  • Widespread economic slowdown in Latin America  

    Global growth stabilization under threat and widespread economic slowdown in Latin America set the tone for the year.

  • Domestic risks limit room for looser monetary policy in LatAm  

    Amid economic weakness, there is room for monetary flexibility in the region, but reform/policy risk is a constraint.

  • A more benign global environment for rates  

    Emerging Markets as a group have benefitted from a more benign global rates environment, and central banks felt less compelled to raise rates

  • Policymakers to the rescue  

    Policymakers' decisions provide some support for emerging market asset prices

  • Global recession fears trigger economic policy reactions  

    The Fed is set to hike rates just once in 2019 to ensure balanced risks

  • When economies diverge  

    The idiosyncratic stories have been responsible for substantial swings in asset prices in in Latin America

  • After some relief in Argentina and Mexico, Brazil takes center stage in LatAm  

    Às vésperas das eleições, a incerteza em torno de reformas continua limitando o ritmo de recuperação no Brasil

  • Emerging Markets under pressure amid a tougher global environment  

    Amid a tougher global environment, emerging markets facing greater vulnerabilities are experiencing sharper currency depreciations

  • Calmer markets, lingering risks  

    The USD has lost a bit of steam against both DM and EM currencies in recent weeks, but risks remain high

  • Trade war risks escalate and turbulence goes on  

    The turbulence goes on in the global scenario, with higher risks of a trade war. In Brazil, uncertainties hinder the economic recovery

  • Central Banks react to market turbulence  

    Strains in external financial markets come at a time in which many countries face a risky political scenario and macro imbalances

  • Increased volatility puts a (temporary) strain on emerging markets  

    Uncertainties associated with the U.S. late cycle and trade relations with that country brought financial volatility back

  • Outlook for emerging markets remains benign, despite trade war risks  

    Global growth has kept up a good pace, supported by easy financial conditions and fiscal policies

  • Emerging markets show resilience amid a bumpier external environment  

    Emerging market assets have performed well during the recent turbulence.

  • Volatility surge in markets unlikely to derail synchronized growth  

    Inflation unlikely to force DM central banks off of their gradual tightening path.

  • Strong growth and still low inflation in 2018  

    Broad global economic growth, moderate inflation and cautious central banks support low volatility.

  • Outlook for growth is still favorable, but monetary policy remains mixed in LatAm  

    Friendly external environment helps countries cope with domestic political risks

  • Easing cycles closer to an end in Latam, in a context of improving global growth  

    Mixed inflation pictures are leading to diverging monetary policy responses in the region.

  • Recovery across LatAm  

    The benign external environment is now fueling activity in LatAm more clearly.

  • Weak activity and stable currencies leave room for further monetary easing in Latam  

    A benign global environment continues to benefit emerging markets.

  • A benign external environment meets a still-clouded political scenario in Latin America  

    Solid global growth and slow pace of monetary tightening have maintained favorable financial conditions.

  • Falling inflation allows for lower inflation target and interest rates in Brazil  

    A lower inflation target for 2019 and 2020 reinforces the outlook for lower inflation results and anchored expectations.

  • LatAm still struggles despite favorable global environment  

    Growth in the region is still far from robust.

  • A favorable global environment, with important events on the horizon  

    The global outlook remains favorable for emerging markets

  • Positive global growth momentum continues  

    The global outlook remains favorable, with a synchronized pick-up in activity indicators.

  • Positive global environment, but for how long?  

    Activity indicators improved further, but some caution is warranted.

  • Encouraging recovery signs in Brazil and Argentina  

    Recent indicators are consistent with our expectation of an economic recovery in South America led by Brazil and Argentina.

  • Stronger global growth, not in LatAm (yet)  

    Global GDP growth is set to accelerate this year, amid risks from policy shifts in the U.S and elections and Brexit in Europe.

  • A tricky scenario unfolds  

    Emerging markets face the challenge of higher U.S. rates, but global financial conditions are well behaved and provide a buffer.

  • Aftermath of the Trump shock  

    The results of the U.S. election will lead to major policy changes. The risk of protectionism is negative for global growth.

  • Stability, but for how long?  

    Global economy remains stable. But risks for the global economy have increased and should be monitored closely.

  • Weak activity in LatAm, despite an improving Brazil  

    Economic activity remains weak in the region. GDP in Brazil is expected to resume growing next year, but from low levels.

  • Will the Rally Resist a Hike?  

    A interest hike by the Fed in 2016 is unlikely to change the favorable global environment for emerging markets.

  • Lower growth worldwide and in Latin America  

    Despite less global growth, the main drivers of more stable external environment for emerging markets remain in place.

  • Global relief redux  

    The global scenario is once again favorable, improving the outlook for exchange rate and inflation in Latin America.

  • Still favorable global environment  

    The external environment remains supportive for Latam currencies.

  • Global Stimulus for Emerging Markets  

    Looser policies are once again supporting the global economy and acted as a tailwind for emerging markets.

  • After the Storm  

    Risky assets improved globally on the back of improving activity data in the U.S., a stable exchange rate in China and the rebound in oil prices.

  • Markets remain volatile, what are the risks for Latam?  

    Growth remains weak across the region, but momentum is mixed.

  • Stagnation fears  

    Recent market moves are a fresh reminder of the significant, ever-present, risks for the world economy.

  • What to expect in 2016?  

    The coming year shouldn’t be bad for the global economy. But risks remain.

  • Markets improve, Latin America adjusts  

    Concerns over global growth have eased in recent weeks.

  • Latin America faces volatility  

    Weak growth limits further monetary policy tightening

  • The China effect  

    The renewed slowdown in China has a modest impact on developed economies, but the impact on emerging markets is bigger.

  • Latin America suffers  

    The scenario has become more difficult for LatAm. Commodity prices declined again, affecting the region’s growth outlook.

  • Risks that alert  

    The Greek crisis and the correction in the Chinese stock market are reminders of the risks still surrounding the global scenario.

  • Global and Brazilian interest rates on the rise  

    Interest rates increased in developed economies as the risks of deflation diminished. Greece remains a risk.

  • Liquidity window has widened. For how long?  

    Emerging markets got some relief as the strong USD trend took a pause and commodities prices improved. But growth remains weak.

  • A permanent change  

    The scope for adopting counter-cyclical policies to boost in Latin America has narrowed

  • Global recovery, but struggles in Latin America  

    The U.S. economy continues to grow while Europe recovers. In Latin America, economies face struggles.

  • Fed and BCB take the other way. Oil prices are stabilizing  

    While the wave of global monetary expansion continues, growth is recovering in parts of the world, and oil prices stabilize.

  • Goodbye 2014, Hello 2015  

    Global growth should improve from last year, but not much.

  • Lower Commodities prices, weaker growth in Latin America  

    The drop in oil prices, mainly driven by supply issues, is positive for global growth.

  • Strong dollar and low oil prices globally  

    November started on a similar note to October, with volatility in financial markets.

  • Strong dollar and low oil prices globally  

    November started on a similar note to October, with volatility in financial markets.

  • Elections in Brazil amid global appreciation of the dollar  

    October has arrived, and with it the run-up to elections in Brazil.

  • Strong Dollar Worldwide  

    The U.S. economy continues to recover slowly, but steadily.

  • Volatility Ahead  

    Following months of high liquidity and low volatility, August began with turbulence in global financial markets.

  • After the World Cup, Back to the Economy  

    The economic performance in the Americas has been uneven.

  • Emerging Markets in Slow Motion  

    We have been warning that the favorable liquidity conditions for emerging economies would not be permanent.

  • Favorable International Conditions, but Disappointing Growth  

    The current conditions are ideal, though temporary. The U.S. recovery continues, but interest rates remain exceptionally low

  • Latin America Faces a New Scenario  

    The reduced stress in emerging markets over the past month was largely driven by the lower interest rates in the U.S.

  • Turbulent Markets in Search of Differentiation  

    Emerging markets had a rough ride in the past month. Some of the stress might ebb.

  • Global Recovery Poses Risks to Emerging Economies  

    The U.S. economy is surprising in the upside and the outlook in China also seems better in 2014.

  • Tapering anticipation impacts Emerging Markets  

    The Fed has been signaling a cautious approach to the removal of stimuli (QE).

  • A window of opportunity for the Emerging Markets  

    The Fed signaled that it would not start tapering its monetary stimulus this year.

  • The Fed Brings Temporary Relief to Latin America  

    The Federal Reserve’s decision to delay the tapering of stimuli in September opened room for two alternative scenarios.

  • Advanced economies improving, emerging economies adjusting  

    The performance of emerging markets is different. Most economies suffered a slowdown in growth and are affected by the prospect of QE tapering in the U.S.

  • Slowdown in emerging economies, recovery in the U.S.  

    In Latin America, slowdown in economic activity along with low inflation figures makes room for a more-expansionary monetary policy bias.

  • The impact of market volatility and street demonstrations  

    Looking beyond the immediate sell-off, Latin America is less vulnerable today to financial shocks than in the past.

  • Growth deceleration and weaker currencies in LatAm  

    The strong dollar environment is here to stay, at least in the medium term.

  • Global Soft Patch, Effects in Latin America  

    There are signs of a slowdown in the world economy in the short term.

  • In a Heterogeneous World, Latin America Advances, with Exceptions  

    Is the global economy picking up or slowing down? There is no simple answer.

  • Bumpy Road but Not a Reverse in Direction  

    This year optimistic mood is now being tested.

  • Step Ahead  

    In Brazil, the rebound has been slow, but there is no room for additional monetary easing. In Latin America, growth remains robust in most countries.

  • A More Hopeful Start  

    World growth should improve throughout 2013. Despite recent volatility, a better outlook during the year should push asset prices up.

  • The Elusive Quest for Growth  

    As the end of the year approaches, there is some positive news in the global landscape.

  • On hold for longer - November 2012  

    Brazil: Slower Growth and Lower Interest Rates; European Policy Sluggishness, U.S. in Fiscal-Cliff Risk Mode

  • A Better Ride in LatAm - October 2012  

    In Brazil, more tax cuts and more stimuli. In Argentina, mild recovery underway. In Mexico, no hikes in sight. In Colombia, resilient growth.

  • Risk Control by the ECB, Steadier Growth - Sep 2012  

    The ECB has reduced risks for the moment; There is evidence of a recovery in economic activity in Brazil; Activity is growing again in Argentina.

  • A Grain of Inflation - August 2012  

    The prices of some agricultural commodities have risen. The spike in grain prices became a common theme across Latin American countries.

  • No Pleasure Cruise - July 2012  

    The world economy risks losing more steam, as signaled by Central Bank’s renewed state of readiness. All eyes still stare at Europe’s woes.

  • A New Wave of Uncertainty  

    The global economy took a turn for the worse since our latest LatAm Macro Monthly report.

  • Further Interest Rate Cuts in Brazil  

    Incomes are rising, public spending is growing and the currency is weaker. But the data point to a more moderate pickup in growth this year.

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