Brazil economic data came out hot and heavy today. First, the central bank raised interest rates 150 basis points from 7.75 pct to 9.25 pct.
Secondly, Brazil retail sales are DOWN -7.1 pct from year ago against a forecast of 4.7 pct.
Why does it matter? Brazil is the 9th largest trading partner of the United States and inflation hitting Brazil will eventually impact trade between the countries. Brazilian goods will cost more to manufacture and export and American goods will be more expensive hurting exports.
The inflation outlook throughout North and South America is a bit concerning and the European outlook looks troubling as well.
