HALISTER1: JPMorgan Raises Brazil Sovereign to Overweight After Temer Win

JPMorgan Raises Brazil Sovereign to Overweight After Temer Win

(Bloomberg) -- Michel Temer’s victory in Lower House on Wednesday, when legislators rejected corruption charge against the president, reduces political uncertainties and improves the prospect for the passage of pension reform, JPMorgan analysts write in note to clients.
  • Brazil sovereign credit raised to overweight as near-term outperformance is likely given light positioning and spread valuations, which are still wider than pre-Temer corruption allegations
  • Margin of Temer’s victory on Wednesday signals the government’s relatively solid position within Congress
  • “We characterize our OW as tactical as a more concrete improving trajectory in fiscal and growth dynamics is needed to turn more bullish in the long run”
  • NOTE: Brazil’s Temer Escapes Corruption Trial to Focus on Economy (4)
To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net To contact the editors responsible for this story: Giulia Camillo at gcamillo@bloomberg.net Taís Fuoco

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Source: BFW (Bloomberg First Word)

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Michel Temer (Federative Republic of Brazil)

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