8 Aug 2013
Flash: Brazil hot topic – TD Securities
FXstreet.com (Barcelona) - Cristian Maggio, Senior Emerging Markets Strategist, Rates and FX Research at TD Securities said the performance of Brazil is definitely the most commonly discussed topic amongst clients.
Key Quotes:
“Investors realize that the BRL is the fallen star in the EM spectrum and are concerned that yield spreads may keep widening and the currency may fall further (as it did, in fact) from around 2.25 at the time of our meetings”.
“While we continue to see value in BRL in the short term, we also recognize that long term weakness is here to stay on a broad macroeconomic deterioration and bad policy in Brazil”.
“Particularly amongst Japanese investors, the 2ppt rise in yields in the past three months has ameliorated total return expectations from BRL-denominated assets. Further increase in yields would likely reinforce this attitude and help stabilize the currency”.
Key Quotes:
“Investors realize that the BRL is the fallen star in the EM spectrum and are concerned that yield spreads may keep widening and the currency may fall further (as it did, in fact) from around 2.25 at the time of our meetings”.
“While we continue to see value in BRL in the short term, we also recognize that long term weakness is here to stay on a broad macroeconomic deterioration and bad policy in Brazil”.
“Particularly amongst Japanese investors, the 2ppt rise in yields in the past three months has ameliorated total return expectations from BRL-denominated assets. Further increase in yields would likely reinforce this attitude and help stabilize the currency”.