Brazil in disarray, hawkish Banxico, Ecuador’s bonds

A worrying flare-up in Brazilian domestic politics, alongside mounting coronavirus fears and a widening current account deficit, is likely to keep Brazil’s financial markets and the real under pressure. Otherwise, the hawkish minutes from Banxico’s February meeting support our view that its easing cycle will end sooner than investors expect. Finally, we suspect that the recent jump in Ecuadorian dollar bond spreads may have run its course.