Latam: Four things to watch in the coming week

研报英文原文证据摘录

Latam: Four things to watch in the coming week

Global Research

27 July 2026ab

EM FI/FX Strategy Emerging Markets

Latin AmericaLatam: Four things to watch in the coming week

Roque Montero

Strategist

Brazil: How Are the Elections Shaping Up for Markets? roque.montero@ubs.com

+1-203-719 2112

Flávio Bolsonaro formally secured his party’s nomination over the weekend, marking the

first major milestone of Brazil’s election season. President Lula is expected to receive the Manik Narain

StrategistPT’s nomination on August 2, while new polls due this week should provide an updated

manik.narain@ubs.com

read on the race. In our recent note, "Brazil: At a multi-year inflection point—what is +44-20-7568 3635

priced?", we argued that Brazil is approaching the October election with markets

showing very different degrees of sensitivity across assets. While the BRL has remained Rafael De La Fuente

Economist

relatively resilient, local rates appear to be embedding a sizable premium, reflecting

rafael.delafuente@ubs.com

fiscal risks rather than inflation concerns (UBSe July IPCA-15: 4.63% y/y). In FX, we +1-203-719 7127

continue to prefer Brazil via long BRLMXN, although we would look to reduce exposure

over the coming month. For investors seeking exposure to right-tail fiscal reform Andrea Casaverde

outcomes, we think 3–6m USDBRL digital put structures with strikes at 4.65–4.75, at an

andrea.casaverde@ubs.com

indicative cost of roughly 10%, offer attractive value. +1-203-713-2515

Mexico: Repricing of rates offers an attractive entry point for receivers

Markets are once again pricing close to three hikes over the coming year, following the

recent repricing higher in global rates and oil prices. However, Mexico's macro backdrop