Publications

Since July, a combination of interest rate volatility and the electoral outcome in the Province of Buenos Aires has generated renewed tensions in financial markets. Higher rates, exchange rate pressures and weaker confidence have led to a slowdown in economic activity.

Argentina's September inflation was 2.1% m/m, reaching 22% for the year. Despite the FX increase, the pass-through to prices was limited due to fiscal balance and the recent dynamic in economic activity.

In the midst of a year of global uncertainty, both due to economic and geopolitical factors, Latam has shown a particular resilience that has manifested itself in the appreciation of its currencies and the reduction of its risk premiums.

The global economy faces a double-edged sword in the last quarter of 2025. On the one hand, risks are mounting linked to US economic policies, a less cooperative international environment, and a host of potential geo-economic and institutional shocks. On the other hand, it maintains greater resilience.

This presentation analyzes the global outlook (recent developments and forecasts), and focuses on the EU and Asia trade and capital flows, as well as the challenges both areas face arising from global changes and the reshaping of the world order.

Last week, the Fed resumed its rate-cutting cycle with a 25bp reduction, its first move this year, citing a shift in the balance of risks amid weaker labor market data. It signaled more cuts ahead, with the median year-end rate projection falling after three steady meetings.

We expect Banxico to deliver a 25bp rate cut and to signal that the easing cycle still has room to continue. We think further easing toward at least the midpoint neutral rate estimate remains warranted amid a weak demand outlook.