Short-Lived Inflation Relief For Venezuela, More Trouble To Come Before Elections: Jefferies

There isn’t a great deal of data with which to parse the extent of stagflation in Venezuela, but the relief seen on inflation and the black market FX rate is likely only temporary, warns Jefferies. Latin American strategist Siobhan Morden writes in a note Monday that while a minor increase in U.S. dollars and the closure of the Colombia-Venezuelan border may help stagflation in the near-term, investors should not “expect a trend reversal or any lasting relief.” Instead, hyperinflation still looks like a serious risk next year, as is the potential for shock to domestic consumption. She expects more aggressive minimum wage hikes that will feed into the cycle of inflation and have to be repeated every few months. More…