Colombia rate cut would be a misstep, Argentina wrap

Market expectations for interest rate cuts in Colombia are growing, but the country’s large current account deficit means that we think any easing would probably prove to be a policy mistake. Elsewhere, Argentine financial market have rallied strongly over the past few weeks, but we don’t expect this to be sustained. Indeed, despite the recent positive newsflow, we think the risk of a sovereign default (regardless of October’s election outcome) remains high.