Previously, bad news for Rousseff has usually meant good news for EWZ, but that was not the case on Monday. Some traders were prepared for that with some arguing that Rousseff’s situation is so dire that markets priced in the fact that congress would push her impeachment forward.
“Bearish bets on Brazil’s biggest exchange-traded fund rose in the run-up to the lower house’s April 17 vote to impeach President Dilma Rousseff. The fund had surged this year on bets that government change would stem the country’s economic malaise, then dropped Monday even after the ballot came out in favor of approving her ouster. The surge in short interest before the vote was an indication that traders see the impeachment as a complicated process, said James Gulbrandsen, the chief investment officer for Latin America at NCH Capital in Rio de Janeiro,” reports Denyse Godoy for Bloomberg.
Last week, investors added about $94 million to EWZ ahead of the impeachment vote. The impeachment proceedings now move to the senate there, where only a majority is needed to impeach Rousseff.
iShares MSCI Brazil Capped ETF
