19 Feb 2015
Brazil scare off investors - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman explained that Investors remain very negative on Brazil right now, and rightly so.
Key Quotes:
"However, positioning seems very one-sided, and so BRL and the Bovespa could see periodic short-covering rallies on positive headlines. Yet the fundamental backdrop will not turn around quickly, giving investors a long window this year to decide on whether or not Levy and Rousseff have done enough to turn the ship around."
"Downgrade risk remains high, as our model shows Brazil right at the cusp of a BB+ rating. If the fiscal numbers don’t improve soon, then the agency honeymoon for Levy will end."
Key Quotes:
"However, positioning seems very one-sided, and so BRL and the Bovespa could see periodic short-covering rallies on positive headlines. Yet the fundamental backdrop will not turn around quickly, giving investors a long window this year to decide on whether or not Levy and Rousseff have done enough to turn the ship around."
"Downgrade risk remains high, as our model shows Brazil right at the cusp of a BB+ rating. If the fiscal numbers don’t improve soon, then the agency honeymoon for Levy will end."