23.10.201720:29:00UTC+00BRAZIL: Caution With Politics Dictates Stock Market Tone

Ibovespa, the benchmark stock index in Brazil, fell 1.27% Monday, closing at 75,413.12 while investors await the result of the House of Representatives vote on the criminal complaint against Michel Temer.

Analysts consider that the vote not only decides the future of the Brazilian President, but will serve as a "thermometer" regarding the pension reform future in the Congress.

"The market will wait for Wednesday, and it is looking at how many votes the government has and how much it will represent in a future deal on pension reform. There are already foreign investors working with the possibility that there will not be time for the Pension Fund to be voted on," said Jos? Costa, an economist at Codepe Corretora.

According to Vitor Suzaki, an analyst at Lerosa Investimentos, there was a risk aversion mood abroad today, but caution about the vote on the complaint against Temer weighed even more in the Ibovespa.

The wait for the decision of the Central Bank's Monetary Policy Committee (Copom), that will meet tomorrow and Wednesday, also made price Monday, holding the index in the negative field.

The cautious mood, say Suzaki and Costa, is expected to get even stronger Tuesday, which could lead the Ibovespa down.

The locally traded U.S. dollar accelerated gains near the closing to rise 1.31%, ending at R$ 3.2320. The third greenback's appreciation in a row against the Brazilian real reflects the greater concern with the foreign scene and the caution among investors regarding the vote on the second criminal complaint against President Michel Temer.