Brazil's Assets Dive as Political Crisis Engulfs President Temer

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Brazil’s real, stocks and bonds tumbled as a fresh political crisis ensnared President Michel Temer and threatened to derail an agenda designed to pull Latin America’s largest economy out of its deepest recession on record, Bloomberg News reported. Trading on the Ibovespa briefly came to a halt Thursday, sinking the most since 2008, with state-owned companies from Petroleo Brasileiro SA to Banco do Brasil SA among the worst losses. The real posted its biggest slide since 1999 even after the central bank intervened to support the currency. The premium investors demand to own the nation’s sovereign bonds rather than U.S. Treasuries jumped the most since June 2013. “Markets will overreact, but the reality is that Brazil is rooting out the corruption that has plagued it for centuries,” said James Gulbrandsen, a Rio de Janeiro-based portfolio manager at NCH Capital who holds Brazilian shares. “This significantly increases the likelihood of new elections within the coming months.” Read more.