MercoPress. South Atlantic News Agency

Relief in Brazilian markets, on the truce between Bolsonaro and the Justices

Ibovespa climbed 1,85% closing at 116,403 points having reached 117,000 during trading, while the overall daily operations totaled 25,8bn Reais, some US$ 5,2bn.

Brazil's Sao Paulo stock exchange recovered on Monday, helped by the positive climate in global markets plus the relative truce following the political-institutional clash of last week between president Jair Bolsonaro and the Supreme Federal Tribunal, even when questions persist among financial operators.

Ibovespa climbed 1,85% closing at 116,403 points having reached 117,000 during trading, while the overall daily operations totalled 25,8bn Reais, some US$ 5,2bn.

According to Rio Gestao de Recursos, a stockbroker company, the stock exchange was reflecting the spirit of the letter sent by president Bolsonaro, which distended at least in the short term the political-institutional storm. The relief should help political discussions over serious issues, and a more constructive scenario looking ahead to some of the anticipated reforms waiting in the legislative.

“The truce is opening space for the recovery of the market and shares, particularly since the listed corporations are going through a very positive moment, and that is what is happening now”, added the stockbroker company.

In the letter which was made public and drafted by ex-president Michel Temer, Bolsonaro reaffirms his respect for Brazilian institutions, following on previous attacks on the Justices and pledging not to comply with their decisions.

The aggressive statements by Bolsonaro last week, on Brazil's Independence Day, made the Bovespa index plunged more than 4% when markets opened. Analysts also pointed out that the rather poor in numbers protests marches on Sunday against president Bolsonaro, might result helpful since risks of a possible impeachment of the president, at least in the short term have dissipated.

“In fact, the improvement of asset values in the market much depends on the visibility of such political issues as sufficient votes to start an impeachment process in Congress”.

Besides the overall situation was helped by a strong response in Wall Street and the surge of oil prices, of which Brazil is a net exporter.