Citi, BCA downgrade Brazilian assets after Lula comeback

Citigroup and BCA Research have downgraded ​Brazilian assets after Lula da Silva's election ​victory, arguing that the ‌risk-reward profile for ​equities, bonds and the currency has worsened as investors reassess prospects for fiscal discipline and structural reforms under ‌the new administration. The calls reflect a broader shift in investor sentiment, with strategists warning that looser fiscal policy, weaker public debt dynamics and slower progress on growth-enhancing reforms could weigh ‌on Brazilian markets despite constraints from a more conservative Congress.

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