Maia Calls For Congress Return

Despite continued concerns surrounding the privatisation agenda amid the BDB CEO dismissal story, the Real rallied another 2% yesterday, which sees USDBRL ~6% off Monday's highs of 5.50. The late session rise in UST yields (10yr yield back to around 1.13%) drove fresh USD selling and EMFX was a main beneficiary.

A better day for local swap rates as well, however 2021's elevated yields displays the ongoing domestic fragilities surrounding the political schedule and the fiscal trajectory.

• Continued press focus on the Brazil variant as the UK bans travel from the country and much of the region. Experts this morning have indicated the variant is most probably in the UK already despite the government dismissing the claim.
• Lower House President Rodrigo Maia called for Congress's early return from recess after the health system in the city of Manaus collapsed under the weight of Covid-19 cases amid the new strain appearing.
• Just released Brazil Nov Retail Sales -0.1% m/m vs expected 0.3% (bbg)