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BRL Steadies as Mantega Departs Transition Team

BRAZIL
  • BRL is starting the session well, with USD/BRL off around 1% following Alckmin’s moves to steady markets late yesterday. The VP-elect looked through near-term market volatility, with planned amendment bills not necessarily meaning Brazil will push spending to meet the full cap requested.
  • The VP-elect also outlined that spending pledges will accompany cuts elsewhere, with tax exemption policy also being reviewed – seen as an ‘essential’ step.
  • Another supportive factor for markets followed the resignation of Mantega from the Lula transition team – a former finance minister who’d overseen a protracted deterioration in government finances.
  • The BCB head Campos Neto is due to speak at a Bloomberg event from 10am local time (1300GMT / 0800ET) today, with President-elect Lula attending a meeting with the Portuguese President at 2pm local time (1700GMT / 1200ET).

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