Latin America Economics & Strategy Daily: Brazil‘s CA & Blackout, Mexico Tariff Risk, BCCh Hold, BCRA pause USD buyback.

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Latin America Economics & Strategy Daily: Brazil‘s CA & Blackout, Mexico Tariff Risk, BCCh Hold, BCRA pause USD buyback.

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29 Jul 2026 09:32:47 ET │ 17 pages

Latin America Economics & Strategy

Daily

Brazil’s CA & Blackout, Mexico Tariff Risk, BCCh Hold, BCRA pause

USD buyback. Ernesto Revilla AC

+1-212-816-2621

ernesto.revilla@citi.com

CITI'S TAKE

Luis E Costa, CFA AC

Today we discuss developments in Brazil, Mexico, Chile and Argentina +44-20-7986-9757

luis.costa@citi.com

Regional Macro — We had a policy decision in Chile last night, where BCCh kept

monetary policy unchanged at 4.5%, acknowledging an outlook that remains Esteban Tamayo AC

subject to a higher-than-usual degree of uncertainty. Next up is BanRep on Friday, esteban.tamayo@citi.com

where markets already have another 50 bps of hikes fully priced in. On the external AC Leonardo Portofront, we have FOMC policy decision today, where we expect the Fed to keep policy

rates unchanged, with no forward guidance probably sustaining some volatility in leonardo.porto@citi.com

US rates. Additionally, we see today a new wave of external volatility, as tensions AC Paulo Lopes

resurfaced in the Middle East, driving Brent once again close to US$ 90. We are

paulo.lopes@citi.comsimultaneously seeing the AI narrative remaining under pressure, with KOSPI and

Nasdaq down. All in all, we expect a day of deleveraging amidst the higher risk Thais Ortega AC

aversion, awaiting the FOMC. We continue to focus on our on relative value trade thais.ortega@citi.com

recommendations for higher-carry LatAm currencies.

Felipe Juncal AC

LatAm Strategy Trades — We remain long BRL against EUR and AUD as the current felipe.juncal@citi.com

macroeconomic backdrop still suggests resilience for high real-yielding EM (link).