Brazil’s real extended its best-in-the-world rally and stocks climbed as a news report that prosecutors requested a preventive arrest of Brazil’s former President Luiz Inacio Lula da Silva added to speculation that a change in government may be drawing closer.
With Thursday’s gain, the real is up 11 percent since the start of March, the most among the world’s most-traded currencies. The Ibovespa climbed to the highest level in seven months, led by banks. The Sao Paulo prosecutors’ press office didn’t confirm the information published by O Globo newspaper on the request. Lula’s lawyers didn’t immediately respond to phone calls seeking comment.
Traders are becoming more bullish as the outlook for President Dilma Rousseff worsens amid a corruption scandal that looks poised to snare Lula, whose name has been tossed around as the party’s leading candidate in the next presidential election. It’s a stark reversal from the sky-is-falling mood that prevailed in Brazilian markets last year when troves of investors abandoned Latin America’s biggest economy, causing the real to tumble 33 percent and wiping out $62 billion in the market value of the nation’s 100 biggest companies.
Brazil Energy Insight 
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