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Brazil

Essentials
Brazil: Political Ambitions Will Meet Economic Reality
Our EM strategists are upgrading Brazilian assets, but they see the election rally as tactical rather than the start of a structural bull market. They lift local currency bonds and sovereign credit from underweight to overweight within their respective EM…
Gabriel Gosselin
2 days ago
BrazilSovereign DebtElections
CoreMacroGeoMacro
Brazil: Political Ambitions Will Meet Economic Reality

The most bullish development for Brazil from the weekend’s elections was not the higher odds of a right-wing presidency, but the likely president’s (Flávio Bolsonaro) stronghold in Congress. Upgrade Brazilian fixed-income markets to overweight and equities to neutral within their respective EM portfolios.

Max Malakhveitchouk, Arthur Budaghyan, Matt Gertken
2 days ago
BrazilSovereign DebtElections
Essentials
Brazil’s Easing Cycle Nears A Pause
Brazilian inflation has eased enough for the BCB to continue cutting rates, but persistent domestic and external pressures should bring the easing cycle to a pause. The central bank delivered a fifth consecutive 25 bps cut, taking the policy rate to 13.75%.…
Armen Hamazaspyan
3 weeks ago
BrazilMonetary Policy
Essentials
Brazil: Off Course
Our EM strategists are downgrading Brazilian equities from neutral to underweight and advise absolute-return investors to stay clear of Brazilian markets. They maintain underweights in domestic bonds and sovereign credit within their respective EM portfolios.…
Gabriel Gosselin
1 month ago
Emerging MarketsBrazil
CoreMacro
Brazil: Off Course

We are downgrading Brazilian equities from neutral to underweight and maintaining our underweights in Brazil's domestic bonds and sovereign credit within their respective EM portfolios. Go long Brazilian 5-year CDS as a short-term trade.

Max Malakhveitchouk, Arthur Budaghyan
1 month ago
Brazil
Essentials
Brazil’s Inflation Problem Isn’t Solved
Brazil’s central bank cut rates for a fourth consecutive meeting, but inflation risks persist. The move followed a softer-than-expected inflation print, and policymakers signaled that more cuts are likely. Our EM strategists have argued that both policymakers…
Armen Hamazaspyan
2 months ago
BrazilInflationMonetary Policy
CoreMacro
Brazil: Overhyped

Overstretched foreign inflows into Brazilian markets will reverse, while soaring oil prices will not benefit Brazil in the near term. Avoid the country’s risk assets and the BRL, and stay underweight Brazilian equities and fixed income relative to EM. We also recommend paying 10-year Brazilian swap rates.

Juan Egana
6 months ago
Latin AmericaBrazilCommodities
CoreMacro
The Case For LATAM Banks

Go long LATAM ex. Brazil banks / short global bank stocks. Brazilian bank equities will underperform due to poor and worsening macro fundamentals. 

Juan Egana
7 months ago
Essentials
Diverging Inflation Paths Favor Mexico Over Brazil
Despite similar headline inflation, underlying dynamics favor Mexico over Brazil across EM assets. Brazil’s latest CPI print was in line with consensus at 4.44%, near the upper end of the target range. In Mexico, inflation surprised modestly to the downside…
Juan Egana, Armen Hamazaspyan
7 months ago
BrazilMexicoLatin America
Essentials
A Hawkish BCB Mounts Risks To Brazilian Markets
Brazilian risk assets will underperform global peers on the back of ultra hawkish monetary policy. The Brazilian Central Bank (BCB) opted to hold interest rates at 15% due to still elevated inflationary pressures. The decision will reinforce a continued…
Juan Egana, Armen Hamazaspyan
8 months ago
BrazilEmerging MarketsMonetary Policy

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