Temer Sees No Honeymoon; Rousseff Comeback Unlikely: Analysts
(Bloomberg) -- Political setbacks suffered by Brazil’s acting President Temer highlight risk of a potential struggle to get reforms approved in Congress, though a reversal of Rousseff impeachment is still unlikely, analysts say.
- Brazil’s Senate doesn’t want Rousseff reinstated, as Temer seen as more able to deal with Congress, Lucas de Aragao, partner at Arko Advice consultancy firm in Brasilia, says in a phone interview
- NOTE: O Globo reported that 2 senators are mulling a change to their anti-Rousseff votes for the final decision about impeachment after 2 ministers resigned in the first 19 days of the Temer government
- Potential change of votes doesn’t mean that Rousseff’s ouster will be reversed, since other senators that voted against impeachment also may change their stance to pro- impeachment, Aragao says
- Accusations against the new govt “definitely don’t help. It makes it obvious that more of these could come to light, which will impair the new government’s efficacy,” Sacha Tihanyi, a senior EM strategist at TD Securities, says
- “If Rousseff returned to her post, markets would react very, very badly”
- While a Rousseff comeback scenario is still premature, the latest political developments add to market uncertainty, Gustavo Pereira, a strategist at Guide Investimentos, says
- “The political backdrop brings noise, as Temer’s measures require support from Congress”
- “There’s no honeymoon period for Temer, it seems,” Mike Moran, head of economic research for the Americas at Standard Chartered Bank, says
- The resignation of ministers “does not come across well and is a timely reminder that the corruption investigations transcend party lines”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Lucas De Aragao (Arko Advice)
Michel Temer (Federative Republic of Brazil)
Mike Moran (Standard Chartered PLC)
Sacha Tihanyi (TD Securities USA LLC)
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