HALISTER1: Brazil Market Prices In Impeachment; Temer Focus Grows: Analysts

Brazil Market Prices In Impeachment; Temer Focus Grows: Analysts

(Bloomberg) -- Trends in Brazilian assets will begin to reflect the market’s perception of a potential new government led by VP Michel Temer as odds of an impeachment of President Rousseff rise, according to analysts.
  • Mkt already priced in Rousseff govt end, Jose Marcio Camargo, parter at Opus Gestão de Recursos and professor at PUC University at Rio says in a phone interview
  • Market optimism may increase should Temer implement fiscal reforms included in PMDB program called “A Bridge for The Future”
  • Despite challenges also seen in a Post-Rousseff scenario, including the continuation of Carwash probe, mkt will at least see a possibility for improvements that won’t be present if Rousseff maintains power, Camargo says
  • NOTE: Camargo is among economists in contact with Temer’s fellow party members giving ideas for potential new govt
  • PMDB meeting tomorrow to discuss dropping support of Rousseff govt adds to BRL gains; move boosts impeachment case, Eduardo Longo, FI manager at Quantitas says
  • Along with U.S. Fed rates, political scenario remains as key driver for Brazilian assets, Leonardo Monoli, partner and director at Jive Asset Gestao de Recursos says
    • Brazil is in stand-by mode while economy sinks; if PMDB confirms split of the current govt at meeting tomorrow, mkt will look for an eventual new coalition and implications of its plans, Monoli says
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jose Camargo (Opus Gestao de Recursos Ltda)
Michel Temer (Federative Republic of Brazil)
Dilma Rousseff (Federative Republic of Brazil)
Eduardo Longo (Quantitas Gestao de Recursos SA)
Leonardo Monoli (Jive Asset Gestao de Recursos Ltda)

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