Risk on or risk off? Global recession, trade talks and Brazil’s inertia

09/Maio - Associados -



Is it time stay risk on or risk off? The IMF revised down its forecasts for the global growth, but some fresh indicators from the US economy and the performance of some commodity prices led us to think if the deceleration is effective. US stocks topped again, and the USD strengthened further.

It is expected the US-China trade talks to come to an end by sometime in May, but the journey until there will not be easy. In Europe, Brexit was postponed to late Oct19, as it seems both Britain and EU prefer delay it rather than face the consequences of a no-deal.

Turning to Brazil, the Pension Reform moved forward in its first stage at the Congress and its final approval has been on the spotlight. Governmental promises tied businessmen and
market sentiment to it, which might be good in the future – if the reform is approved – but it means economic activity may stay stalled in the short term. Other themes, such as trade openness and tax reform would provide a short to mid-term relief to the economy.

Macro View report by Pezco