Economic and manufacturing indicators are generally softening in major Latin American economies. Additionally, market volatility can be expected in the near term as global markets react to the Ukraine-Russia conflict. The Leeco Trading team is closely monitoring these factors to gauge their impact on international trading.

Our team has over two decades of experience in international trading and has the expertise to guide you through volatile markets. Contact our team today to receive a quote for your next order.

Manufacturing PMI fell month-over-month in both Brazil and Mexico during January 2022 as new orders sharply fell.

Capacity utilization fell month-over-month in Brazil during December 2021 as factory production slowed, but increased month-over-month in Mexico.

Below is a chart showing January 2022 import levels for Mexico, Brazil and Chile. Imports to Mexico, Brazil and Chile all fell month-over-month.

Car production remains volatile in major Latin American economies amid the global semiconductor chip shortage. Car production in Brazil plummeted 31.1% month-over-month in January 2022. While car production increased 18.3% month-over-month in Mexico, production is down 9.1% year-over-year.

The Mexican economy was stagnant on a seasonally-adjusted quarter-over-quarter basis during Q4 2021 as a decline in the service sector offset increases in industrial output and agricultural production. This stagnation follows a 0.4% contraction during Q3 2021.

Leeco Trading’s Executive Vice President, Jason Fredstrom, shares his insights on how the Ukraine-Russia conflict could impact international sourcing.

“The Leeco Trading team regularly monitors world events to stay up-to-date with market trends that could impact our customers. Currently, we are closely watching the Ukraine-Russia conflict, as markets across the world have already seen impacts from escalating tensions. While analysts say it is too early to tell how markets will react in the long-term, we will monitor this conflict and keep customers updated with any repercussions it may have on the international trading market, such as economic sanctions.”

Jason Fredstrom | Executive Vice President, Leeco Trading

Recent economic news points towards mixed economic and manufacturing activity across key regional markets.

The Organization for Economic Cooperation and Development (OECD) stated that Mexico’s economy is expected to return to pre-pandemic levels by Q3 2022. OECD stated that Mexican exports will benefit from growth in the U.S. and that consumption will grow as more people get vaccinated and the labor market improves.

Mexico is preparing a multibillion-dollar infrastructure plan with private companies in an effort to boost economic growth. The plan includes over 40 projects in areas including highways, energy, telecommunications and ports. Mexico is also increasing efforts to attract investment from the U.S.

Brazil’s central bank chief Roberto Campos Neto stated that consumer prices are continuing to rise as core inflation increases, despite aggressive monetary tightening measures. The central bank has raised rates to 10.75% and indicated that further adjustments may be necessary to slow inflation, which reached an annual rate of 10.4% in January 2022.

Market reactions from escalations in the Ukraine-Russia conflict have started to impact economies across the world. Stock markets in in Europe and Asia plummeted, while oil prices spiked above $100 per barrel for the first time since 2014. Wheat futures and soybean futures also reached an all-time high. While analysts are unsure as to how markets will be impacted in the long-term by the conflict, they say volatility in the near term can be expected. The U.S. and Europe have also pledged to place economic sanctions on Russia, which could have a ripple effect on global markets.