Brazil Assets Rally as Lula Spending Cuts Bring Temporary Relief
- Markets cheer reductions, Lula’s commitment to fiscal goals
- Swap rates fall, Brazilian real gains after recent turbulence
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Brazilian assets broadly rallied again Thursday after Finance Minister Fernando Haddad announced spending cuts meant to help hit the country’s fiscal goals, providing a reprieve to markets.
Swap rates fell and the Brazilian real strengthened amid a benign session for local assets, as investors welcomed Haddad’s Wednesday night announcement that the government would make 25.9 billion reais ($4.7 billion) in budget cuts in 2025. President Luiz Inacio Lula da Silva approved the plan and ordered the economic team to comply with the country’s fiscal framework, Haddad told reporters.