JPMorgan Chase upgraded Mexican equities to overweight from neutral amid strong economic growth in the United States.
The mentioned financial institution’s strategist Emy Shayo Cherman stated that the good upward dynamic demonstrated by the US economic system continues to support Mexican consumers through remittances. The expert also noted that weaker MXN increases the purchasing power of the specified dollars.
Besides, JPMorgan Chase cut Brazilian equities. In this context, the experts of the financial institution mentioned the slowdown in the growth of the Chinese economy against the background of emerging pressure from the tariff policy of Donald Trump, who won the United States presidential election in November and will return to the White House in January.
Emy Shayo Cherman, in a note published last Tuesday, underlined that there is a pretty high correlation between industrial production in Mexico and the US. It is worth noting that Donald Trump has already announced his intention to impose 25% tariffs on Mexican goods. According to him, the relevant decision is because there are drug flows from the mentioned country to the United States. Also, in the appropriate context, he drew attention to illegal migration from the side of the Mexican border.
Returning to the assessment of Brazil’s prospects, it is worth noting that, according to JPMorgan Chase, a slowdown in the upward dynamic Chinese economy, which is the second largest in the world, may hurt Brasilia through lower commodity prices. In the relevant context, it was mentioned that this Latin American country is a major exporter of soy.
JPMorgan Chase expects Brazil’s central bank to extend interest rate hikes in 2025, and Mexico’s financial regulator to continue monetary policy easing next year.
As we have reported earlier, JPMorgan Chase CEO Says Banks Must Fight Back Against Regulators.
