BRL likely to lower Brazilian assets price

In Brazil, uncertainty keeps weighing on all asset classes. A weak government and a troubled economy, coupled with somewhat unpredictable fiscal, monetary, and FX policy, call for higher risk premia for financial assets.


The inconsistency between these policies is just a reflection of how complex the situation is and the lack of control that policy makers have.


"As a result, a steepening on the curve and a weaker BRL as fiscal risk premia likely to lower Brazilian assets price", says Barclays.