Brazilian assets: Relatively unscathed amid coronavirus outbreak – Rabobank

Analysts at Rabobank describe the previous week’s rise in safe-havens, due to global risk-off sentiment triggered by fears of an escalating coronavirus outbreak, while also saying that Brazilian assets went through relatively unscathed.

Key quotes

"In the FX space, safe havens stood among the best performers as expected, with DXY and JPY increasing by 0.3% and 0.7%, respectively."

"In this context, the BRL moved in accord with its EM peers and depreciated c. 0.5%. The local equity index posted a flattish performance, which was sufficient to outperform the global average."

"This week, activity-related news continued to dominate the agenda. After the adjustment for seasonal effects, all sectors have posted a payroll expansion in December."

"The first confidence surveys for January painted a mixed picture."

"For the next week, the data-docket includes December balance of payments (Mon.), for which we project a current account deficit of USD 6.0 billion, with the trailing 12-month deficit flat at USD 51.0 billion (2.9% of GDP) - higher than the historical average of 2.1% of GDP (since 1995)."