Good morning! Bad news in China, Germany causes push the Brazilian currency down. The challenges of Jair Bolsonaro’s party to grow, become relevant—but remain aligned to the president. Another defeat for Sergio Moro. Facebook could be fined for listening in to its users. Enjoy your read! (This newsletter is for platinum subscribers only. Become one now!)
1 dollar = 4 reais
The rollercoaster ride that has dominated Brazilian markets continued strong on Wednesday. After closing up 1.36 percent on Tuesday, the São Paulo stock market index fell 2.94 percent yesterday. Meanwhile, the Brazilian currency lost almost 2 percent against the U.S. Dollar—which broke the psychological threshold of USD 1: BRL 4.
Why it matters. Market instability is not only a result of the U.S.-China trade war. As a matter of fact, global economic data has consistently worsened this year, in a sort of synchronized slump. Japan and three of Europe’s four largest economies (Germany, Italy, and the UK) are bound for a recession by year-end. And China, Brazil’s undisputed leading trading partner, is growing at its slowest pace of the past 27 years. These kinds of dreadful scenarios turn investors risk-averse—and peripheral (and more volatile) economies such as Brazil suffer...