Latin American currencies are leading the way
The epicenter of the coronavirus outbreak is in Latin America at the moment but the market is saying that it will die down and good days are ahead.
The top of the EM leaderboard today is filled with LatAm currencies, led by some of the hardest hit countries.
I have been talking about buying the Mexican peso for awhile and the breakdown in USD/MXN continues. It's fallen nearly non-stop for three weeks.
The trade is clearly towards a return-to-normal at the moment but I'm starting to think it could be even better than that. It's a return-to-normal but it will come with ultra-low rates and super-easy fiscal policies.
The peso will also get the additional benefit of US-reshoring. The factories leaving China won't go back to the US, they will go to Mexico.
