Related: Brazilian Election Lifts Leveraged Latin America ETF
There are significant risks to EWZ and other Brazilian assets should the left-leaning Haddad win the election later this month.
“A victory by Haddad–who represents the Workers’ Party (PT)–could spark market fears that he would be more hesitant to press on with the fiscal consolidation process started by the outgoing government. Haddad’s proposals include capital controls and a roll-back of reforms including privatizations. Yet the candidate has recently been striking a softer tone, making him somewhat of an unknown for investors,” according to BlackRock.
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