Argentina's Mauricio Macrifaces backlash over the economy's dismal state; investors can't wait for Argentinecorporates to resume bond sales; and Latin America struggles to rejoin a globaleconomy amid growing anti-trade sentiment.
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Public perception of Argentina's Mauricio Macri is turning sour,as citizens displeased with the plight of the economy demand faster results fromtheir president, The Wall Street Journalreports. Despite highly lauded reforms announced by Macri to counter his predecessor'smostly disastrous economic policies, the situation in Argentina remains grim withinflation and unemployment still running high. While not all of the country's problemsare of Macri's own making, he did promise Argentines a brighter future by the endof this year, and a perceived failure to deliver has led to anger among constituents."He said he'd get rid of inflation and I thought he would. But he's done theopposite," said a local magazine vendor. "In a country where economicdiscontent has undone previous leaders," Macri must work faster to fulfillhis promises and avoid another "social explosion," the Journal reported.
Even after Argentina ended its exile from international debtmarkets, the country's corporates are in no rush to issue global bonds, "muchto the chagrin of yield-starved investors," Andres Martinez and Carolina Millanwrite for Bloomberg News. Although many companies are in a position to benefit fromfalling yields, "executives want to make sure they learned from past mistakes,like loading up on the kind of cheap borrowings that led to a distressed debt crisisin Brazil." Some investors understand that it will take time for the country'scorporate sector to acclimate to a new scenario following 10 years of isolation,but others cannot wait for bond sales to resume. "I'm tired of all the provincialstuff and the city stuff, especially once you start seeing some of the more unwieldyprovinces," one investor noted. "Come on, give me real companies now."
Some Latin American countries that once turned their backs onglobalization are now knocking on the doors of their global peers, The Economist reports. This change in attitudeis driven by a harsh reality where the commodities boom has ended and countrieslike Brazil, Argentina and Venezuela find themselves trapped in economic recessions.However, "Latin America's need to conquer new markets comes as globalizationis in retreat elsewhere," including in the U.S. where both presidential candidateshave voiced opposition to the proposed Trans-Pacific Partnership. "Having gonethrough its anti-globalization backlash, Latin America is finding that the worldnow offers fewer easy gains than in the past. So it will be hard to make up forlost time," The Economist says. "Butat least the region is (mostly) back on the right track."
Before Mexico's central bank decided to hike its benchmark interest rate by 50 basis points on Sept.29, the Financial Times' Jude Webber exploredsome of the key factors that might have a bearing on the decision. In addition toinflation expectations, sluggish economic growth and Mexico's increasing debt burden,the central bank must have been keeping a close eye on the first U.S. presidentialdebate between Donald Trump and Hillary Clinton. The Mexican peso steadily weakenedto an all-time low in recent weeks on fears that Trump would emerge victorious,but the currency pared some of those losses following Clinton's superior performancein the debate — a development that could have given the central bank pause for thought.With U.S. elections still more than a month away, "a rise now could see potentially wastinga bullet if Mr. Trump rallies and the peso crashes again," Webber wrote atthe time.