USD/BRL opens slightly lower but.....>

BRAZILIAN REAL: USD/BRL opens slightly lower but well toward the top end of

yesterday's range, holding much of the BRL weakness seen Wednesday's reports of

a material delay to voting on domestic pensions reform. Brazil's economy

minister Guedes spoke yesterday to try and talk up the positives of the bill

itself and stated that the government is prepared to make concessions on the

reform itself in order to ensure passage through the lower house (although he

declined to specify what the concessions would be). The lower house delayed

voting on the bill until next week, at the earliest, which would mark just the

first of many steps to push the reforms through to law.

-USD/BRL implied vols remain elevated on the uncertainty, with 1m implied

printing just shy of 14 points so far today but still materially below the

highest levels of the year in late March at 16.2 points.

-Brazilian equities had a particularly volatile session Wednesday, settling

lower and closing below the 100-dma. Support should kick in at the March lows of

91,584.