Big Question for Brazil Mkts Post-Cup Concerns Protests: SocGen
2014-07-09 03:19:55.621 GMT
By Grant Clark
July 9 (Bloomberg) -- In very short term, SocGen sees
smaller impact of “humiliating” World Cup defeat on Brazilian
asset prices than some anticipate, strategist Eamon Aghdasi
writes in e-mailed note.
* Bad news is investors will shift back to reality of economic
woes; good news is there could be “more buzz” regarding
Rousseff’s political vulnerability, possibility for new
economic stewardship next year
* Bigger question is whether protests akin to a year ago
return in weeks ahead after tournament provided respite from
smoldering civil frustrations
* An adverse scenario is turbulent protests and Rousseff’s
popularity staying intact, “an unfortunate combination of
structural worries and diminished hope for new policies”
* Political trends in terms of demonstrations, electoral polls
take on somewhat greater significance
* SocGen remains cautious in general; recommends Pre-DI 16s17s
steepeners and holding a bias to sell BRLMXN
* Recommendations in part motivated by concern that any
disturbance in current low volatility, relatively stable
U.S. rates market environment could shake investors’
appetite for yield, willingness to overlook Brazilian
economic realities
* Related story: Why UBS Says Brazil’s 7-1 Trouncing Is
Bearish for Stock Market
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Grant Clark in Singapore at +65-6212-1101 or
gclark@bloomberg.net
To contact the editors responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net
2014-07-09 03:19:55.621 GMT
By Grant Clark
July 9 (Bloomberg) -- In very short term, SocGen sees
smaller impact of “humiliating” World Cup defeat on Brazilian
asset prices than some anticipate, strategist Eamon Aghdasi
writes in e-mailed note.
* Bad news is investors will shift back to reality of economic
woes; good news is there could be “more buzz” regarding
Rousseff’s political vulnerability, possibility for new
economic stewardship next year
* Bigger question is whether protests akin to a year ago
return in weeks ahead after tournament provided respite from
smoldering civil frustrations
* An adverse scenario is turbulent protests and Rousseff’s
popularity staying intact, “an unfortunate combination of
structural worries and diminished hope for new policies”
* Political trends in terms of demonstrations, electoral polls
take on somewhat greater significance
* SocGen remains cautious in general; recommends Pre-DI 16s17s
steepeners and holding a bias to sell BRLMXN
* Recommendations in part motivated by concern that any
disturbance in current low volatility, relatively stable
U.S. rates market environment could shake investors’
appetite for yield, willingness to overlook Brazilian
economic realities
* Related story: Why UBS Says Brazil’s 7-1 Trouncing Is
Bearish for Stock Market
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Grant Clark in Singapore at +65-6212-1101 or
gclark@bloomberg.net
To contact the editors responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net