Latin America Data Watch: One shock after another - Now comes the weather

Research evidence excerpt

Latin America Data Watch: One shock after another - Now comes the weather

.moreira@jpmorgan.com

visible across Latin America: the growing importance of domestic drivers in Banco J.P. Morgan S.A.

shaping inflation, growth, and monetary policy outcomes. Its effects are likely to Mirella Sampaio

reinforce the differentiation that has increasingly characterized the regional (55-11) 4950-3289

mirella.sampaio@jpmorgan.com

outlook. Banco J.P. Morgan S.A.

Gustavo Ribeiro

Brazil appears less exposed to the direct effects of El Niño than some of its Andean (55-11) 4950-4059

peers, but food inflation remains an important transmission channel. This comes gustavo.ribeiro@jpmorgan.com

at a delicate stage of the monetary policy cycle. The BCB is likely to see softer Banco J.P. Morgan S.A.

activity and inflation data between meetings, facilitating another 25bp cut at the Juan Goldin

August meeting. Yet, the medium-term outlook remains sensitive to government (57 601) 869 8746

stimulus, which might continue to drive resilient activity and still-elevated juan.goldin@jpmchase.com

inflation expectations. In that context, weather-related food-price shocks can add BANCO J.P. MORGAN COLOMBIA S.A

upside risks to the inflation outlook and further narrow the room for additional Santiago Homberg Saury

(52-55) 5540-9499

easing. santiago.hombergsaury@jpmchase.com

J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P.

Figure 1: El Niño 1 + 2 anomaly Figure 2: El Niño strength probabilities Morgan Grupo Financiero

An anomaly above 2.0 points to a “very strong” event Issued June 2026 Katherine Marney

(1-212) 834-2285

2009-10 2015-16 2026 Projected

3.5 100 katherine.v.marney@jpmorgan.com

3.0 Very strong J.P. Morgan Securities LLC

2.5 80

2.0 60 Strong Mariana Zepeda

1.5

1.0 40 Moderate (1-212) 272-0919