USD/BRL on the backfoot in early.....>

BRAZILIAN REAL: USD/BRL on the backfoot in early trading, closing the gap on the

200-dma to the downside at 3.8407 and extending the BRL's rally from last week's

lows to just shy of 4%. BRL is one of the best performers in LatAm FX at

present, but the generally lower USD and modest risk-on is also buoying CLP and

COP.

-Weekend press has proved generally positive for BRL, which shrugged off poor

manufacturing PMI data, as Valor reported that the number of Brazilian lawmakers

in favour of pension reform had reached a majority in Congress. Nonetheless,

some resistance remains, with the Lower House opposing some key government

reforms. The Brazilian economy minister is due to address these lawmakers on

Wednesday this week in an attempt to increase support for the reforms.

-Further support emanated from Bolsonaro's Twitter feed, as he touted proposals

to cut corporate taxes. Nonetheless, much of the weekend press also focused on

imminent trucker strikes over fuel costs. Any prolonged strike could hinder

growth as it did in Q2 last year.

-March trade balance data is due later today.