Brazilian financial markets are unlikely to repeat their dramatic rally in 2016 even if Congress approves a business-friendly reform agenda during the coming year, as asset values are nearly at the ceiling of the country’s junk credit rating.
Brazil’s bonds, stocks and currency have been among the best-performing assets in the world this year as investors welcomed promises by new President Michel Temer to pass measures capping spending and trimming public pensions.
Investors are now waiting anxiously to see if Temer can make good on those promises, but even if a fragmented Congress approves his ambitious reform agenda, analysts say there is little room for more dramatic rises.
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