USD/BRL opens lower and just below...>

BRAZILIAN REAL: USD/BRL opens lower and just below the 200-dma at 3.8414 and is

stronger against most others in LatAm FX space (outperformers are CLP and CRC)

as the tentative risk-on environment helps buoy EMFX more broadly. Brazilian

data this morning has also been favourable, with both the services and composite

PMI numbers for March edging higher over the February readings.

-Market focus remains on the political backdrop, which has eased in recent

sessions as the spat between President Bolsonaro and the newly emboldened house

speaker Maia cooled off. This dragged implied vols (particularly in the

shorter-end of the curve) lower, easing 1m vols down to below 14 points today

from recent highs of 16.228 last week. Nonetheless, markets may not remain calm

heading into April 9th, where the pension reform bill report is to be submitted

to the Lower House and Maia will issue his judgement.

-Brazil's economy minister Guedes is due to speak at a Lower House Committee on

the subject of pension reforms later today.