In February, Moody’s downgraded debt issued by Petrobras to Ba2, two levels below investment grade, stoking speculation regarding Brazil’s sovereign credit rating.
“Lawyers writing the impeachment request will say Rousseff can be removed from office for manipulating fiscal accounts this year, continuing with financial practices implemented during her previous term that have been already censored by the country’s audit court. Rousseff says she hasn’t done anything wrong,” according to Bloomberg.
The problem for investors is that while the idea of impeaching Rousseff is gaining momentum, the process could last well into next year, if not longer and still not bring the result market participants are looking for. However, any appearance that Rousseff is vulnerable to being removed from power could bring short-term upside to EWZ.
iShares MSCI Brazil Capped ETF
