“The broad outperformance in Latin America -- particularly Argentina, Mexico, and Brazil -- speaks to the broad reform programs we have seen in each of these countries and the stable backdrop these reforms have provided,” said Kofi Bentsi, a money manager focused on emerging-market corporate bonds at Pimco, the second-largest U.S. fixed-income management firm. He says Argentina and Brazil are likely to continue to outperform. 

Jim Barrineau, the co-head of emerging-markets debt at Schroders in New York, said the region has benefited from a combination of the highest yields among emerging markets and improving economies, especially in Argentina and Brazil, which overcame deep recessions. This backdrop, he says, tends to favor corporate bonds over government securities.

“They are more responsive to changes in economic growth,” said Barrineau, who helps oversee Schroders’ $520 billion in assets. His emerging-market bond fund has outperformed 81 percent of peers this year.

Eoin Treacy's view

The LME Metals Index has been on a recovery trajectory since January 2016 and has rallied to break a lengthy medium-term downtrend.

The CRB Index, which is skewed by energy prices, has been ranging below 200 since late 2015 but is currently bouncing, having found support in June.

In a number of audios and videos I have highlighted the commonality shared by the LME Metals Index, the FTSE-350 Mining Index, the S&P/ASX 300 Resources Index, the iShares Brazil ETF or the iShares Mexico ETF. The fact South Africa’s Johannesburg All Share Index is breaking out to new highs also reflects the recovery in commodities and related markets.

The fact that some of Latin America’s economies have responded to the recessions, induced by the collapse in commodity prices from 2011, by implementing political and regulatory reforms is a point in their favour as prices recover.

Brazil’s iBovespa Index is now testing its 2008 peak above 70,000 and is quite overextended in the short-term following seven consecutive weeks on the upside. Some consolidation is likely but a sustained move below the trend mean would be required to question medium-term scope for additional upside.

The Mexican Bolsa is currently engaged in a pull back towards the mean but a sustained move below it would be required to question medium-term scope for additional upside.

The Argentine Index continues to trend higher in a staircase step sequence advance, and a sustained move below the trend mean would be required to question the persistence of the move.