• Current account balance to GDP ratio does not seem to improve in 2015: Earlier data announcements in April show that Brazil's current account balance has improved slightly in dollar terms. But, it seems to be paused at that point.
  
  The new methodology of revised current account calculations puts the 2014 deficit at -4.5% of GDP compared with the original deficit of -3.9%.
  
  Secondly, the bulk of the correction in dollar terms has come from a decline in outflows related to dividend payments.
  
  Thirdly, the contraction in imports has not helped much as it is almost matched by the decline in exports.
  
  Finally, the BRL depreciation and the resulting lower nominal dollar GDP also implies a higher current account deficit to GDP ratio.
  
  
• Industrial production slump to persist in Q2: Industrial production (IP) tapered to 5.9% YoY (-2.4% QoQ) in Q1 - the worst decline in IP in nearly six years. Moreover, the pace of contraction has risen over past couple of quarters and, given the shape of domestic and external demand growth, it would be prudent to expect continued negative prints on IP over the next few months.
  
  
• BRL remains the key risk to the inflation outlook: The fact that the macro economy is in considerably weak shape and the twin deficit (current account and the fiscal) could continue to widen this year makes the BRL that much more vulnerable, particularly when the Fed begins rate tightening later this year.