FXStreet (Delhi) – Research Team at BBH, notes that the Brazilian asset prices sold off yesterday on the bank of the latest developments in the corruption investigation and the monetary policy developments.
Key Quotes
“On the former, in short, police arrested three important figures: the leader of ruling PT in the senate, Delcidio Amaral; an agribusiness baron, Jose Carlos Bumlai, who is very close to former president Lula; and Andre Esteves, CEO of the investment bank BTG Pactual.”
“There are two possible consequences from this that could concern markets. First, the arrest of such a powerful figure in the PT could create headwinds and reverse the relatively favourable political moment the government is experiencing, curbing its chances to push through fiscal measures. Second, some could grow concerned about systemic risks stemming from the BTG story. We think there are some grounds for concluding the first, but very little to support the second. Either way, it’s too soon to tell.”
(Market News Provided by FXstreet)