HALISTER1: Brazilian Markets Showing Resilience Amid Reforms: Analysts

Brazilian Markets Showing Resilience Amid Reforms: Analysts

(Bloomberg) -- BRL and Brazil stock gains, DI rate drop reflect investor perceptions that govt will continue to push through fiscal reforms, analysts say.
  • Even if vote on spending cap bill is postponed until Feb., govt can manage budget, Rodrigo Borges, head of fixed income at Franklin Templeton Brasil, says in a phone interview
  • Low inflation and weak activity in short term will spur extended rate cutting cycle; lower rates, along with budget reforms and smaller corporate and household debt burdens in 2017 may fuel growth in 2018 of about 3%
    • Approval of new pension regime could help create a “virtuous cycle” in Brazil
  • Delay of spending cap bill wouldn’t be terrible, says Mauricio Oreng, senior strategist at Rabobank
    • Positive for market is that social security reform finally started to be discussed this week in the Congress
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Rodrigo Borges (Franklin Resources Inc)
Mauricio Oreng (Banco Rabobank International Brasil SA)

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