Halister News

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--BRENDAN MURRAY

(Bloomberg) -- JBS’s allegations may paralyze the government, MCM says in report, arguing that “the sooner Temer falls, the better.”

• MCM sees resignation as more appropriate option and impeachment as “more costly”
• “Odebrecht’s plea bargain was not able to paralyze the government and Congress, but JBS’s one will be”
  • President Michel Temer “will only survive if the recording, still undisclosed, is misleading. However, the seriousness of the content of the conversation between Temer and Joesley Batista will hardly fall short of what was reported ”
  • “Paralysis will last as long as Temer remains in the Presidency”
• “From the point of view of economy and restoration of the normality, the faster Temer falls, the better”
  • “Thus, resignation would be more appropriate option to start the process of restoration of governability”
  • “As long as Temer resists, crisis will escalate in markets and on the streets”
• “Impeachment is the most costly output. Because it is time- consuming and because if we get to that point it means that Temer has taken forward the willingness to defend himself politically ”
• “In this scenario, reforms will stop”
• NOTE: Brazil Plunges Back Into Political Crisis as Markets Brace

(Bloomberg) -- Prospect of Fed rate increases is among factors that balances the dovish local central bank and limited bond supply, Krzysztof Izdebski, fixed-income fund manager at Union Investment mutual fund says in emailed comments.

• 10-year zloty bonds fell Thursday for the first time in three days, pushing the yield higher by 4bps to 3.35%
  • “Debt is weighed down by prospects of a rate hike in the U.S. and market uncertainty linked to Donald Trump,” Izdebski says
  • What’s shielding the market from greater rises in yields is the prospect of limited bond supply in coming months, Poland’s dovish central bank and foreign investor interest in local debt, he adds
• NOTE: Poland sold 3b zloty of bonds at auction, with investor demand at 6.86b zloty
  • Polish finance ministry has already financed 63% of its 2017 borrowing needs, and has flagged that debt supply in coming months may be limited
• Local 5- year bond yield trades +3bps at 2.780%, while 2-year notes trade -3bps at 1.916%, closing in on auction level

To contact the reporter on this story: Adrian Krajewski in Warsaw at akrajewski4@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Anil Varma