Latam Talking Points

According to the Focus survey, the median GDP growth expectations for 2018 declined 19 bps to 2.51%, and did not change for 2019 and 2020 (at 3.00% and 2.50%, respectively). IPCA inflation expectations declined once again for 2018 to 3.45% (from 3.49%). For 2019, inflation expectations declined 3bps to 4.00% and remained flat at 4.00% for 2020. Median forecasts for the exchange rate depreciated slightly to BRL 3.40/USD for 2018 (from 3.37), did not change for 2019 (at 3.40) and depreciated to BRL 3.50/USD for 2020 (from 3.47).
According to a poll conducted by CNT/MDA, blank/null/undecided voters continue to dominate the majority of polled scenarios. In a scenario without Lula (PT), Jair Bolsonaro (PSL) would lead with 18%, with Marina Silva (REDE) gathering 11%, Ciro Gomes (PDT) (9.0%), Geraldo Alckmin (PSDB) (5.3%), Álvaro Dias (PODE) (3.0%) and Fernando Haddad (PT) (2.3%). Blank/null/undecided would reach 45.7%. In a scenario in which Lula (PT) runs for president, he would amass 32.4% of votes in the first round, followed by Jair Bolsonaro (16.7%) and Marina Silva (7.6%). Ciro Gomes would have 5.4% of votes, while Geraldo Alckmin would have 4.0% and Álvaro Dias 2.5%. Blank/null/undecided would reach 26.7% in this scenario. Additionally, in a scenario with only 5 candidates, Bolsonaro has 20%, Marina 15%, Ciro 11%, Alckmin 8% and Haddad 4%. Blank/null/undecided reached 42%.

Day Ahead: March’s Service Sector Survey (PMS) will be released at 9:00 AM (SP Time). We forecast a 0.6% yoy decrease (consensus: -1.30%). The Central Bank announced the auction of 5,000 new FX swap contracts and the rollover of up to 4,225 FX swap contracts.


Day Ahead: The national statistics authority will publish the supply-side breakdown of GDP growth for 1Q18 at 1:00 PM (SP Time). We and the consensus estimate activity increased 0.6% from the previous quarter, resulting in annual growth of 2.3% (consensus: 2.2%).  Later at 4:00 PM (SP Time) the coincident activity indicator (ISE) for the month of March will come through. We expect the coincident indicator to post growth of 2.6% yoy (adjusted for calendar effects), while consensus’ estimates point to a 2.4% yoy growth.


Day Ahead:  The statistics institute (INEI) will announce March’s GDP proxy. We and the consensus estimate that the GDP proxy accelerated to 3.3% year-over-year. On the same day, INEI will publish April’s unemployment rate. We expect the unemployment rate to come in at 7.1%.


Day Ahead: The statistics institute (INDEC) will publish the National CPI for April at 4:00 PM (SP Time). According to private estimates (Elypsis consulting) headline inflation in April was 2.6% mom, while the core measure reached 1.7% mom.

Fuente: Itaú

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