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Uncertainty For Brazilian Assets

BRAZIL

USDBRL continuing the move higher above 5.40 and local 10yr swap rates now up 30 bps on the session to hit 7.76%.


Baleia Rossi announced his candidacy yesterday for Lower House Speaker and as expected, emphasized his independence from the federal government. Rossi also defended the expansion of the social program, Bolsa Familia, and/or the resumption of the lower income/informal employees payment. While analysts are hesitant to confirm if Rossi's rhetoric may be political or genuine, it heightens the uncertainty for Brazilian assets – evident in the unwind of both rates and the currency.


*USDBRL Resistance - 100day at 5.4092 has just been tested.

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