Chile’s road to recovery and equities’ tumultuous six months

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Chile: On The Road to Recovery in 2021?

• Chile has cut short-term rates to 0.5%, lowest since 2008 crisis.
• Rate cuts follow plunge in car sales, weak economic activity.
• Chile’s debt totals 190% of GDP, high among emerging nations.
• Steepening yield curve offers optimism of recovery in 2021.

Equities: Follow the Narrative

• Equities unperturbed in Jan, Feb as coronavirus spread through China.
• Indexes fell as narrative changed to possible global pandemic in late Feb.
• Markets rallied as massive government stimulus was announced in March.
• Equities turned cautious in June and July as infection rate began to rise.