Brazil Market Optimism for Govt Reforms Intact: Analysts
(Bloomberg) -- BRL gains and 5-yr CDS tightening year-to-date show market optimism remains intact despite the government being slow in adopting reforms, analysts say.
- While the government can’t approve reforms at the speed expected by some market participants, Temer’s economic team has given a ’’clear direction’’ toward fiscal adjustment, Roberto Padovani, economist at Banco Votorantim, says in a phone interview
- Govt has kept embracing the reform agenda; drop in country’s CDS reflects confidence reforms may speed up after impeachment and municipal elections, Jason Vieira, chief economist at Infinity Asset Management, says
- Public spending cap vote will be first big challenge of fiscal agenda
- BRL may keep gaining even when Fed hikes again as the U.S. central bank usually signals its steps and the decision will be fully priced in, Vieira says
- NOTE: While tally of Aug. 10 Senate vote signaled Rousseff will likely be permanently removed from office, voting in Lower House was more difficult, with govt giving into demands on salary increases to get states’ debt bill approved
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Roberto Padovani (Banco Votorantim SA)
Jason Vieira (Infinity Asset Management Administracao de Recursos)
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