Espresso for April 14th
QUOTE OF THE DAY
“Life is as it is. We can only face if we have hope”. Dilma Rousseff in an interview with 10 journalists recalling the period when she was tortured during the dictatorship and looking towards Sunday´s decision on impeachment.
WHAT MARKETS ARE TALKING ABOUT
ROUSSEFF WILLING TO CONCEAL IF NOT IMPEACHED
The president claims she is being victim of a “state of coup” orchestrated by Vice President Michel Temer and lower house speaker Eduardo Cunha from the Brazilian Democratic Party (PMDB). Rousseff estimates a potential easy win to block impeachment with 213 votes in her favor from the 172 needed. If impeachment is blocked, Rousseff would call for a process of dialogue and a pact with opposition leaders, workers and business representatives to focus on limiting government spending. No plans to call for elections if she wins though.
ROUSSEFF COULD BE MAKING HEADLINES UNTIL MID-MAY
In the case Brazilian lower house approves impeachment proceedings to go ahead on Sunday; Rousseff could be removed as president by the Senate by May 11 or 15. After the election of a special committee for the case, and the designation of its leader and rapporteur, the vote on weather Rousseff will or will not be impeached could take place on May 10 or 11, the vote would be simple majority of half plus one. A fast track version of the process would allow voting 20 days after Sunday but is seen as unlikely.
ARGENTINA BACK INTO DEBT CAPITAL MARKETS AFTER 15 YEARS
The US Court of Appeals of New York lifted an injunction that clears the way for ARGENTINA to issue new debt. As a result, the country is planning to borrow $15 bn by issuing new bonds under New York law. Up to $12.5 bn of the funds will be used to pay settlement with creditors and the reminder or $2.5 bn will go to budget surpluses. ARGENTINA is looking to issue Notes due in 2021, 2026 and 2046 and is targeting a yield between 7.5% and 8% on the new securities. Since Macri took office bonds have rallied considerably.
BOFA (BAC) reported a 13% and 6.7% decrease in 1Q16 earnings and sales respectively. The decline was due to a drop in trading and underwriting revenue and an increase in provisions for credit losses related to energy loans. Earnings were slightly below analysts´ estimates. Shares are down 1.3% in pre-market.
BlackRock (BLK) reported a 20% decline in 1Q16 profits as a result of early stock-market slump this year and charges from job cuts. Earnings were below analysts´ estimates.