BRL Gains Support From Political Recess, Italy: INVX
(Bloomberg) -- Recess for Brazil Congress and judiciary helping to ease political tensions, and reports that Italian banks will be supported by government also helping to bolster BRL, Eduardo Velho, chief-economist at INVX Global Partners says, in a phone interview.
- While Trump’s inauguration is still a risk for EMFX, the initial impact of his election has already been priced in treasuries, curbing pressures in markets
- Brazil investors see Meirelles as a strong minister, supported by president Temer, despite pressures linked to poor economic results
- Reports on accusations related to Carwash probe have failed to hit Temer, who continues to successfully pass reforms in Congress
- After recess, market will monitor political developments as potential renewed drivers of volatility, Velho says
- BCB more likely to cut Selic rate by 50bps in January; additional drop in inflation expectations toward 4.5% target in 2017 or wider BRL advance, along with a bigger output gap, could convince BCB to cut by 75bps
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HALISTER1Source: BFW (Bloomberg First Word)
People Eduardo Velho (Invx Global Partners)
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