Perceived Risk of Brazil’s Economy Hits Five Year Low Ahead of Pension Overhaul Vote

The perceived risk of Latin America’s largest economy has dropped to a five-year low as President Jair Bolsonaro’s proposed overhaul of the country’s pension system nears a key vote in Congress, Bloomberg News reported. The cost to insure Brazil’s debt against default for five years narrowed to as low as 138 basis points over comparable U.S. Treasuries Tuesday morning, the tightest since September 2014, three months before the onset of a crushing two-year recession in the country. Its spread over credit-default swaps in Mexico, the region’s second-largest economy, is the least in more than six years. Brazil country risk at lowest since 2014, approaching that of Mexico. There’s greater global market appetite for riskier emerging-market assets as the U.S. Federal Reserve considers whether to reduce its key interest rate. Read more

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