1. Brazil cannot run away from the social security reform – necessary but not sufficient.
2. Social security reform is no panacea – fiscal imbalances extend beyond.
3. In politics, the good is the enemy of enough – no walk in the park.
4. We believe the primary deficit will be eliminated before the end of 2020.
5. A challenging global environment, characterized by risk repricing – but there are important mitigating factors. Interest rates in the U.S. may not go as high as previously thought.
6. Brazilian CDS: risk premium repricing globally vs. the idiosyncratic component. Opposing vectors: the external component usually prevails.
7. BRL: low interest rates coupled with a weaker-for-longer BRL – an unusual combination in Brazil.
8. Inflation: don’t worry, be happy. Going for the 3rd year in a row with inflation below the target midpoint
9. Monetary policy: beyond the Selic. Focusing on the causes of large banking spreads, reducing reserve requirements.
10. Confidence + credit = consumption. Our above-consensus forecast for GDP growth is 3%.
Source: Santander Corporate & Investment Banking
This text was copied from the source above mentioned.
* *Employed by a non-US affiliate of Santander Investment Securities Inc. and is not registered/qualified as a research analyst under FINRA rules.
