Signs Of An Equity Rally?

We maintain our cautious stance towards Latin American equities, but there are an increasing number of signs that the recent spell of weakness could be coming to an end. The technical pictures of Chile'sIGPA index, the Mexican IPC and Brazil's Bovespa are most compelling, in our view. That said, given that this latest wave of optimism towards LatAm markets has been fuelled in large part by positive trade data coming out of China - from which the positive impact may be short-lived - we are happy to sit on the sidelines until we get a clearer image of sentiment towards EM assets.

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