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Local Assets Underperforming As Fiscal Risks Continue To Weigh

BRAZIL
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  • Local media are reporting today on the difficulty Finance Minister Haddad is having in pushing through his fiscal agenda amidst ongoing tensions with congress. As noted previously, the Senate has filed an appeal against the recent Supreme Court ruling, which suspended some sections of the law that extended the payroll tax exemption, and Haddad has said that he’s been trying to talk to mayors about the tax exemption since October.
  • Meanwhile, the Senate is due to vote today on the renewal of a benefit for the events sector. It is also due to debate soon the framework which allows the government to increase spending further. O Globo report that the government may need an extra BRL 65bn next year to close its accounts.
  • Against this challenging backdrop, Brazilian assets are underperforming today, with USDBRL currently up by over 1% and DI swap rates rising by another 15bp or more across much of the curve. Data wise, March Federal debt data are due at 1830BST.
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  • Local media are reporting today on the difficulty Finance Minister Haddad is having in pushing through his fiscal agenda amidst ongoing tensions with congress. As noted previously, the Senate has filed an appeal against the recent Supreme Court ruling, which suspended some sections of the law that extended the payroll tax exemption, and Haddad has said that he’s been trying to talk to mayors about the tax exemption since October.
  • Meanwhile, the Senate is due to vote today on the renewal of a benefit for the events sector. It is also due to debate soon the framework which allows the government to increase spending further. O Globo report that the government may need an extra BRL 65bn next year to close its accounts.
  • Against this challenging backdrop, Brazilian assets are underperforming today, with USDBRL currently up by over 1% and DI swap rates rising by another 15bp or more across much of the curve. Data wise, March Federal debt data are due at 1830BST.