Espresso for May 10th
QUOTE OF THE DAY
“This is a very sad moment. I’m afraid for what will happen,” said Marcos da Costa, president of the Brazilian Bar association, OAB, in São Paulo. “This is a political game that is affecting everyday life in Brazil and paralysing the economy.”
WHAT MARKETS ARE TALKING ABOUT
BRAZIL’S 30-MINUTE COLLAPSE
The impeachment of President Dilma Rousseff brought caos on Monday after the acting head of the lower house of congress said he was annulling a critical vote in the process. Yesterday, the interim unexpectedly called for a new impeachment vote in his chamber. The move spurred panic among investors who had considered Rousseff’s ouster a foregone conclusion. The Speaker, Waldir Maranhão, said a marathon vote on April 17, in which a landslide majority of the lower house had supported the impeachment, had contained procedural irregularities and would be cancelled and held again. He did not give a specific date.
The head of the senate`s commission on impeachment, Raimundo Lira, said the senate vote would go ahead as scheduled on Wednesday.The real weakened nearly four per cent against the dollar on the news of the acting house Speaker’s decision before recovering to trade down 1.77% at R$3.5638 around midday. “What happens next is unclear,” Capital Economics said in a note. “It’s by no means certain that Mr Maranhão has the authority to return the vote to the lower house, and the ensuing confusion risks triggering a constitutional crisis.”
According to the Buenos Aires Grain Exchange, a record 1.6 million hectares of soybean plantings were lost because of floods. The natural disaster has a significant impact on global supplies because the nation is the world’s third-biggest shipper, trailing the U.S. and Brazil, and it’s also the No. 1 exporter of soybean meal, made from crushing the oilseed and used in livestock feed. Analysts surveyed by Bloomberg expect that the country’s soybean crop will total 55.6 million metric tons. That would be 5.8% lower than what the U.S. Department of Agriculture estimated last month. The agency is scheduled to update its World Agricultural Supply and Demand Estimates, or WASDE, report at noon on Tuesday. Hedge funds increased their net-bullish holdings in soybeans by 4.6% to 167,554 futures and options contracts in the week ended May 3, according to U.S. Commodity Futures Trading Commission data released three days later.