Yea, Chile seems to some how always run counter cycle to everyone else. Generally a sell-off in the developed world equates to a sell-off in latin america. Instead everyone starts betting that Chile is a safe-haven, because everyone else is going start pumping stimulus money in to their economies.
I also sort of suspected the recent strength in the peso was some sort of safe-haven play, coupled with relatively higher interest rates compared to the rest of World. Probably did not help that the credit rating agencies cut the UK rating to bring Chile and the UK in to closer competitors from an investment grade credit rating perspective.
I don't know how much it matters, but last week we had 7 presidents in little Frutillar for the Pacific Alliance meeting. I even had lunch at the same restaurant as Colombia's president. While I was hanging out at my friends restaurant, all the business people were there. They kept taking photos of the volcano and commenting on how beautiful it was. I also wonder if just having that many market movers in the neighborhood for a week, also got some money moving in to Chile as people look around and realize just how stable Chile is from an investment perspective. Right now, out of all those countries, Chile is still in better shape stability wise.
There is suddenly a rush to jump on the Pacific Alliance bandwagon. Even the basket case Mercosur is looking to negotiate trade agreements with the Pacific Aliance, Canada, the U.S., New Zealand. Mercosur was a good idea that was killed by all the competing domestic socialist agendas. Socialist free trade agreements are kind of an oxymoron, and is likely at the heart of what is wrong with European Union. However, when you look at what is making the Pacific Alliance tick, you have Mexico with economic size and proximity to the United States, Peru and Colombia have been adding growth and population to the market, but I think it is Chile's credit rating and stability that is providing economic anchor and credibility to the alliance.
They just have to be careful not to over expand it. Costa Rica is applying to be the next member, but I am not sure what they bring to the table. Mercosur likly failed, because it was too big. Free trade agreements become less and less effective as they expand, with too many competing interests. I think there is also too much of a good thing problem with trade agreements. A little bit of an open market is good, so let's open up even more; when in fact, it starts undermining growth all the way around.