After Argentina and Turkey, could Brazil be the next emerging market (EM) that goes into crisis? These events are not linked – each of these countries currently has idiosyncratic weaknesses. In the case of Brazil, the fiscal deficit is in the spotlight, coupled with the presidential elections in October.
On the face of it, things don’t look good for Mexico; and that’s reflected in asset prices. Its largest trading partner has threatened to scrap a free trade agreement that's been in place for almost a quarter century. In addition, a populist is leading in the polls to replace President Peña in the July elections. But look again and you might see a country potentially on the cusp of a spectacular comeback.
In a surprising result, the general election has ended in a hung parliament. At the time of writing, the Conservative party has won approximately 318 seats. Labour is at 261, the SNP 35, the Liberal Democrats 12 and the DUP 10. UKIP did not win any seats.
When Theresa May called the snap election in mid-April it was hers to lose, with the Conservatives leading Labour in the polls by around 20 percentage points – the highest since the early 1980s – which could have yielded a majority of circa 100 seats.
In the event, the gamble has failed to pay off, and the governance of the country hangs in the balance.