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Protests in Latin America are generally a positive force for structural improvements
Weekly investor research
11 November 2019
Yields in the US are rising again after the yield curve inversion earlier this year. Emerging Markets (EM) equities outperformed in spite of rising political noise in Latin America. In Bolivia, Evo Morales stepped down after protests against alleged vote-rigging. The Brazilian investment thesis remains sound despite former President Lula’s release from prison as the population demands reform of criminal law. Argentina receives positive signals from multilateral lenders. China reforms small banks as foreign investors increase positions in Renminbi (RMB). The central banks in Czech Republic, Serbia, Peru and Thailand each cut policy rates by 25bps. The first round of the presidential election in Romania delivered no outright winner. India’s sovereign rating outlook was downgraded by Moody’s. Lebanese banks restrict currency withdrawals and overseas transfers. The high level of youth unemployment threatens political stability in Morocco. Kenya scraps the cap on interest rates. Oil theft in Nigeria exposes the fragility of the authority of the Federal Government vis-à-vis local governments.