Brazil’s political class is being hit severe rounds of fresh developments on corruption scandals and intra-party backlash and every time they suffer markets cheers and value of Brazilian assets soar.
Brazil’s current president facing impeachment over her role in state owned oil major Petrobras. Former President Popular Lula de Silva narrowly escaped arrests by taking up a role in Dilma Rousseff’s government, which has made him immune to prosecution by courts other than Supreme Court. One Judge even tried to prevent his appointment, calling it obstruction of justice.
The dust wasn’t settled on these issues when the government faced coalition implosion. Markets cheered again.
Government’s biggest coalition partner PMDM members will be voting today, led by Vice President Michel Temer.
Congress will be voting next month on President Dilma Rousseff’s impeachment.
Brazil’s stocks, currencies, bonds soared last night after PMDB announced voting decision. Analysts points that voting means, that PMDB is already out of the coalition and only thing matter is whether the vote is unanimous or not.
Expect another round of outperformance by Brazilian assets, if the vote turns out to be unanimous.
Brazilian Real strengthen 7.4% this year as situation worsened for Dilma. Currently trading at 3.66 per Dollar.
The material has been provided by InstaForex Company – www.instaforex.com