As the great EM unwind continues unabated, we’ve noted that in some hard-hit countries, the terrible trio of falling commodity prices, decelerating Chinese demand, and looming Fed hike has been exacerbated by political turmoil.
In Brazil, for instance, President Dilma Rousseff’s approval rating is at 8% and voters are calling for her impeachment amid allegations of fiscal book cooking and corruption at Petrobras where she was chairwoman for seven years. This comes as the BRL looks set for further weakness and as the country grapples with stagflation and dual deficits.