Market seems to be strongly disapproving government's decision on Friday to replace its well respected finance minister Joaquim Levy with President Dilma Rouseff's closer aide Nelson Barbosa. President facing probe and impeachment over allegations over corruption at state owned PetroBras, would feel much comfort, with one of his closer aide, managing the finance ministry.

Fitch's downgrade Brazil's debt to junk last week, already triggered selloffs in country's assets and now Mr. Levy's departure unlikely to bore well for the assets. Moody is the last of three top credit rating agency that has kept Brazil's debt rated one notch above junk. However, negative outlook means it could soon join Fitch and S&P.

Real dropped 2.7%, to trade as low as 3.98 per Dollar, with political uncertainty and worsening inflation outlook, coupled with worst recession in 25 years might again push Real to test the recent low of 4.25 against Dollar and fall beyond. On Friday, Brazil's benchmark stock index dropped more than 3% on the news

Brazil has $322 billion debt outstanding and that is denominated in US Dollar. We expect, bashing Brazilian assets to continue in 2016, even if Dollar weakens against majors.