Latin American markets in the firing line

Latin American currencies and equities have been among the worst performers in the emerging world this month as fears about the spread of the coronavirus have intensified. The region has limited direct economic ties with the countries suffering outbreaks and only reported its first case late this month. But the region is vulnerable to the recent falls in commodity prices. As it happens, there isn’t much evidence of an economic hit in the latest data. Weekly trade figures published by Brazil and Chile show that exports held up surprisingly well in the first half of this month. And confidence indicators in Brazil were reasonably strong in February. But our sense is that the data are likely to get worse as we move into March.