Trading Market Insights: March 2024

Major Latin American economies saw little change in interest rates, but experienced a slight drop in inflation rates month-over-month. Both Mexico and Brazil saw strengthening manufacturing conditions in February 2024 and analysts are optimistic of further growth in the coming months.

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.

Brazil Announces Economic Growth

According to a recent report by Brazil’s Institute of Geography and Statistics, the gross domestic product in Brazil, South America’s largest country, grew by 2.9% in 2023, driven by a record 15.1% expansion in the agricultural sector. With the growth experienced, Brazil once again became one of the top ten largest economies in the world.

Mexican Rate Cuts Loom as Inflation trends down

Mexico’s headline inflation rate eased slightly more than expected in February, which suggests the possibility that the central bank could kick off a monetary easing cycle later this month. As inflation maintains its downward trend economists expect policy makers to start lowering interest rates at their next meeting in late March.

Chilean Economy Performance Improves

The Chilean Central Bank announced that the performance of the country’s economy increased by 2.5% year-over-year in January 2024. According to the Chilean Central Bank, the increase on a yearly basis reflects improvements in all main sectors of the economy, with the production of goods increasing by 4.1%, trading activities increasing by 3.7% and services increasing by 1.9%.

Brazilian Dry Weather Threatens Sugar Cane Crops

Brazil is set to harvest a smaller-than-expected sugar cane crop in the upcoming season, due to a forecast of continued dry weather. Brazil’s outlook for poor rainfall in the coming months following an already drier period earlier this year is set to harm the quality of the cane that will be harvested and has forced a delay in harvest.

Due to these factors Brazil is estimated to have less sugar to trade starting in October 2024, a critical period for markets. According to analysts Brazil’s highest producing area, Center-South, will only yield 41 million tons, a 3% decrease year-over-year.

This information is an excerpt from Leeco Trading’s Month Year Trading Market Report newsletter.

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