Brazil markets set to rally after Congress backs impeachment
By Bruno Federowski
SAO PAULO, April 17 (Reuters) - Brazil's financial markets are expected to react with euphoria on Monday after the lower house of Congress backed impeachment proceedings against President Dilma Rousseff, analysts and traders said.
Brazil's stocks and currency have been among the world's best performing assets on bets that the leftist president's ouster would open the door to a more business-friendly administration, better equipped to lift the economy out of its worst recession since the 1930s.
Hopes of political change have already helped lift the Bovespa benchmark stock index more than 20 percent this year to its highest level since mid-2015.
In a sign the rally could continue, an exchange-traded fund of Brazilian equities gained 3.8 percent in Tokyo trading shortly after the result was announced.
But traders' initial euphoria after Sunday`s Congressional vote could soon give way to caution as they look for hints of what policy would look like in a government led by Vice President Michel Temer.
"Initially, details will be ignored and irrationality will prevail for one, two days," said Thiago Castellan Castro, a trader with Renascença brokerage in São Paulo. "After that, we'll go back to assessing technical issues - monetary policy, who'll be in charge of policymaking."
Sunday's vote by 367 votes to 137 against - with 7 abstentions and 2 absences - was widely seen as the biggest hurdle to ousting the unpopular Rousseff.
Temer would now take office if a majority of the Senate votes to open a trial against Rousseff in early May, as is expected. At that point the president would be suspended during the trial, which could last up to six months, and would be dismissed if found guilty. Continuación...