This train is picking up speed and as most of those who follow the Brazilian chart updates will know there is now momentum via Bolsonaro's pension reform. This is giving consumers the ability to drive growth into 2020 and beyond via things like credit and the appropriate monetary policy.
Inflation is still coming down which means CB can keep lower rates, this will provide profit taking and reloading opportunities in 2020. For those really wanting to dig deeper into the flows, retail housing market will be a useful gauge to the next chapter as it will highlight the pace / acceleration of the pick-up.
On the technical side, a very clean 5 wave sequence over a multi year period. What we are trading here is the ABC corrective leg via Brazil momentum and capturing a double whammy with USD devaluation. Here tracking 3.70x as the level in play for USDBRL in 2020 macro flows, I also favour BRL on other crosses in particular versus MXN:
Thanks for keeping the support coming with likes, comments, questions and etc. We can open the Brazil conversation here for the year ahead. For those wanting to dig deeper with the 2020 strategies I have attached them in the related charts.
The Bolsonaro pension reform is an absolutely terrible deal for the working class, how does this translate to "give consumers the ability to drive growth"???