Brazil Gets Some Breathing Room From Rating Agencies: Barclays

Despite ratings agency S&P recently changing its outlook on Brazil to negative, Moody’s has positively surprised by changing its outlook to stable, thereby providing some breathing room to Brazil, notes Barclays.

Analysts at Barclays in their August 13, 2015 research report titled: “Bear in a China shop” note the PBoC’s decision last week to devalue its currency caused reverberations in broader markets, including EM credit.

Brazil in liquidity ‘sweet spot’

Sebastian Vargas and team at Barclays point out that last week witnessed mixed action on the EM-credit specific developments, with Moody’s downgrading Brazil’s sovereign rating to Baa3 from Baa2 and changed the outlook to stable. The analysts note that though the downgrade was broadly anticipated to take place this month, the...