Brazilian economy crashes for third straight quarter
South America’s largest economy shrank for a third straight quarter over the three months to September, the longest such stretch since records began in the mid-1990s.
Brazil's gross domestic product fell at a 1.7% quarter-on-quarter clip, leaving it 4.5% below last year’s level.
Tuesday’s print was also worse than the 1.2% drop which economists had been anticipating.
The country had been left reeling from the end of the China-led commodities consumption boom, with political infighting hobbling efforts to reign in the public deficit and weakness in the currency.
On Tuesday, analysts at Credit Suisse told clients they should ‘underweight’ Brazilian stocks in 2016 and set out eight things they would need to see before they would promptly change their view.
Some of the factors cited were: a sufficient currency devaluation to ensure repair to Brazil's external position; evidence of the government's recommitment to fiscal discipline; disinflation; reform boosting productivity and tackling the entrenched elevated cost of capital; and a stabilisation of the GDP and earnings growth outlook.
As of 11:25 the US dollar was 0.27% stronger versus the Brazilian real at 3.8779.