Amlo intervenes, Chile’s success, Brazil tumbling

The Mexican government’s bill to partly reverse reforms in the electricity sector threatens to open up a Pandora’s box of legal wrangling and will further damage the prospects for private investment. The latest news from Chile reaffirms our positive view on the economic outlook, but Brazil is moving in the opposite direction. Although the worsening COVID-19 outbreak in Brazil would argue in favour of more monetary and fiscal support, policymakers’ hands are tied. Indeed, we now think a 50bp hike at the central bank meeting later this month is likely.