Possible scenario
Central Bank Containment
25% Chance
The Banco Central do Brasil and National Treasury try to ring-fence the selloff through liquidity operations, smaller auction sizes, and a more hawkish rate signal. This can buy time, though it does not solve the underlying fiscal credibility problem.
Initial impacts
- Riskier companies' borrowing costs Up
- Market volatility Up
- 10-year Treasury yield Down
- US dollar Up
Secondary impacts
- Finance -0.2%
- Energy -0.2%
- Non-Energy Materials -0.2%
Portfolio impact
S&P 500-0.2%
Each figure is the modeled move of the S&P 500 if the outcome occurs. For information only. Not investment advice.
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