On July 8, most Latin American assets declined after U.S. President Donald Trump declared the interim accord to end the war with Iran was over. This announcement triggered a 5% rise in oil prices to a two-week high and dampened global risk sentiment.

Trump also indicated that the U.S. might launch additional strikes and take control of Iran's Kharg Island following new attacks by Tehran on U.S. bases in the Gulf. These developments came a day after fresh U.S. military strikes and the revocation of a license allowing Tehran to sell oil internationally.

International bonds in oil-importing countries such as Kenya and Sri Lanka dropped by over one cent on the dollar earlier in the session but later recovered some losses.

Lale Akoner, global market strategist for eToro, commented, "The bigger issue for investors is the upcoming inflation read-through... the ceasefire had helped contain some of the risk premium in oil; its collapse puts energy prices back at the center of the market outlook."

Attention in Latin America shifted back to geopolitical risks after weeks of domestic factors influencing markets. Meanwhile, the International Monetary Fund lowered its 2026 global growth forecast to 3.0%, citing ongoing risks from the Middle East conflict, trade fragmentation, and potential market corrections related to AI.

Additionally, the National Bank of Poland announced it might intervene in the foreign exchange market amid the turbulent conditions.

For now, market analysts view these changes as a repricing of risk rather than a fundamental shift in the market outlook.

Sources