Hi Dan. So what is your view on the current situation in Brazil? Rates were falling and therefore we had a good potential for mark-to-market. But as of now rates were held and the economic conditions, due to high spending and increasing deficits, could be a barrier for continued rate decreases. However, with the replacement of RCN by anyone who just takes orders from the current administration, we could see administrative rate cuts. I wish it was music to my ears but "should we stay or should we go?"
Love the "should we stay or should we go." In my view, rates reflect risk—not the rates "forced" by central banks, but the negotiated DI. Long story short, recent portfolios I've been working on for my Brazilian clients are shifting from mark-to-market to laddered bonds. Additionally, many are reducing their Brazilian positions.
Hi Dan. So what is your view on the current situation in Brazil? Rates were falling and therefore we had a good potential for mark-to-market. But as of now rates were held and the economic conditions, due to high spending and increasing deficits, could be a barrier for continued rate decreases. However, with the replacement of RCN by anyone who just takes orders from the current administration, we could see administrative rate cuts. I wish it was music to my ears but "should we stay or should we go?"
Love the "should we stay or should we go." In my view, rates reflect risk—not the rates "forced" by central banks, but the negotiated DI. Long story short, recent portfolios I've been working on for my Brazilian clients are shifting from mark-to-market to laddered bonds. Additionally, many are reducing their Brazilian positions.
Good input. Thank you.