Since the Brazilian Central Bank (BCB) released its latest monetary policy minutes on June 27th, the Brazilian real has depreciated for three days in a row. Will the BRL resume its strengthening trajectory, or is the currency set…
The new fiscal framework will fail to prevent the rise of the public debt-to-GDP ratio as it relies on overly optimistic revenue growth. A rising public debt-to-GDP ratio will lead to a widening fiscal risk premium in Brazilian…
Remain cautious and defensive overall. Stay long DM Europe over EM Europe. Look for EM opportunities in Southeast Asia and Latin America over Greater China.
We recently highlighted that the Brazilian real was among the best performing major currencies in 2022 (second only to the dollar). However, the BRL’s relative strength has reversed in recent months and it has been among…
The only feasible way for Brazil to stabilize its public debt-to-GDP ratio is by having nominal GDP growth meaningfully above government borrowing costs. This requires large fiscal stimulus to boost nominal GDP and much lower…
Both Brazilian equities in USD terms and the currency have dropped below their 200-day moving averages since the electoral return of ex-President Luiz Inácio Lula da Silva on October 31, as investors discount a reversal in…
On Monday, investors cheered former president Luiz Inácio Lula da Silva’s (Lula) victory over incumbent Jair Bolsonaro in the second round of Brazil’s presidential election held over the weekend. However,…
Stay short Greater China assets. Stay long Japanese yen. Hold back on Brazil for now but look forward to opportunities in future.
Russia’s conflict with the West will escalate and trigger more bad news for risky assets this fall. Beyond that, stalemate looms. Latin American equities present a potential opportunity once the macro and geopolitical backdrop…
Opinion polls ahead of Brazil’s election this weekend suggest that odds are in favor of a victory for former President Luiz Inácio Lula da Silva. While a runoff election on October 30 will be needed if no candidate…