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All eyes on the pension reform report in Brazil

June 13, 2019

The rapporteur Samuel Moreira is expected to present the full report to the Lower House Special Committee today, at 9:30 AM

Talk of the Day
 

Brazil

April’s retail sales reinforced the view that economic activity remains weak in the second quarter of 2019. Broad retail sales remained stable (seasonally-adjusted) in April, weaker than market expectations (0.3%) and our forecast (0.4%), while core retail sales decreased 0.6%, also below market expectations (-0.1%) and our estimate (-0.4%). Compared to the same period of 2018, the indicators increased 3.1% and 1.7%, respectively. The breakdown shows that 5 out of the 10 retail sectors increased in the month (namely, fuels, vehicles and parts, among others), while the other half receded (i.e., supermarkets, textiles and footwear, etc). ** Full story here.

Additionally, paper cardboard dispatches, an indicator related to the industrial production, declined 1.8% mom/sa in May. With this release, our industrial production forecast now stands at -0.5% mom/sa for the same month.

Day Ahead: At 9:00 AM, April’s service sector revenues will be released, for which we forecast a 0.5% mom/sa gain, leading the year-over-year print to a 0.5% decline. On the political front, after announcing the broader details of his report on the pension reform, the rapporteur Samuel Moreira is expected to present the full report to the Lower House Special Committee today, at 9:30 AM.

Argentina
 

Day Ahead: At 4:00 PM, the INDEC will publish the National CPI for May. The consulting firm Elypsis, which tracks prices, estimates a 3.1% mom increase, down from 3.4% in April.

Peru

Day Ahead: At 8:00 PM, the Central Bank of Peru (BCRP) will publish its June’s decision on the reference rate, which we expect to remain unchanged (at 2.75%). Given the weaker growth in the core economies, the more accommodative stance of the Fed, controlled inflation and the recent trade war developments, we believe that the central bank can keep an expansionary monetary policy and may even signal the possibility of lower interest rates ahead.



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