Trading Market Insights: March 2023

Economic and manufacturing outlooks remain uncertain in Latin America. While metrics like inflation are generally improving, manufacturing activity is softening in the region’s core economies. This uncertainty could prompt Latin American manufacturers to consider increasing raw material imports to reduce production costs.???

The Leeco Trading team is carefully monitoring international trading market developments, particularly within the Latin American region. Here are some of the biggest headlines we are watching.

Mexico Raises Interest Rate

The Bank of Mexico voted to increase the benchmark interest rate by 50 basis points to 11%, above market forecasts. The bank cited a “complex inflation scenario,” including consumer prices rising more-than-expected in January, in their decision to raise interest rates.

Brazil 2022 Economic Activity

Brazil’s economic activity increased by 2.9% in 2022, according to the central bank’s IBC-BR economic activity index. Strong service sector activity and increased government spending helped boost economic activity. This increase occurred despite slowing activity in recent months.

Brazil Central Bank, President Disagree on Inflation Targets

Brazil’s central bank and president are currently in disagreement about the country’s inflation targets. President Luiz Inacio Lula da Silva called for the central bank to raise inflation targets, saying that the official benchmark interest rate is an obstacle to economic growth. Governor Roberto Campos Neto, on the other hand, stated that central bank is not looking to change inflation targets, and that he will oppose any changes to the targets.

IMF: Latin America Faces Slowing Growth, High Inflation

According to IMF analysts, the Latin American region faces a challenging 2023. While overall inflationary pressure is easing and the region’s economy expanded nearly 4% in 2022, core inflation remains high in several countries. Due to higher interest rates, falling commodity prices and global economic uncertainty, the region’s economy is expected to grow 2% in 2023. Many people in the region are also expected to see their living standards decline, which will create a challenging socio-economic environment for governments.?

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This information is an excerpt from Leeco Trading’s March 2023 Trading Market Report newsletter. Contact us today to request the full version of our March Trading Market Report newsletter.