LatAm yields rise along with US yields on sticky inflation
Yields across the world have been rising for much of 2024, with a particularly aggressive leg higher in April, as market expectations for central bank rate cuts have downshifted. The easing has been less than expected, in part because inflation has surprised to the upside in some instances. The persistence in inflation seems focused in the services sector, although the picture globally is complicated by rising energy prices. In addition, fears of inflation pass-through from currency depreciation have encouraged central banks to slow the pace of policy normalisation and keep rate differentials from falling further. Despite the recent hesitancy shown by LatAm central banks, we believe there has only been a delay.
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