Brazilian equities and country-specific exchange traded funds (ETFs) have been rallying on the ouster of President Dilma Rousseff and her feckless administration.
However, the impeachment proceedings has hit a hurdle, triggering volatile swings in the emerging market.
The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) was down 2.0% Monday after plunging as much as 7.2% earlier in the morning.
Meanwhile, the ProShares UltraShort MSCI Brazil Capped ETF (NYSEArca: BZQ), which takes the -2x or -200% daily performance of the MSCI Brazil 25/50 Index, jumped 3.8% on the volatility.
Brazilian stocks plummeted after the interim chief of Brazil’s lower house called for a new vote on Rousseff’s impeachment, acknowledging an argument that the ballot last month had procedure irregularities, Bloomberg reports.
The Senate had been scheduled to vote this week on the impeachment and whether to compel Rousseff to stand trial for using state banks to shore up government accounts.[related_stories]
The Brazilian Ibovespa stock benchmark and real currency posted the biggest rallies among major markets this year on speculation Rousseff’s exit would pave the way for new government to pull the emerging market out of its worst recession in a century, fight inflation and cut fiscal deficits.