Itaú BBA - Brazil’s lawmakers approve the pension reform report at the Constitutional and Justice Committee

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Brazil’s lawmakers approve the pension reform report at the Constitutional and Justice Committee

April 24, 2019

The proposal will now head to a Special Committee at the Lower House, yet to be created.

Talk of the Day

Brazil

Lower House lawmakers approved the government’s proposal for the pension reform at the Constitutional and Justice Committee yesterday. 48 members voted in favor of the report, of a total of 66 representatives. The proposal will now head to a Special Committee at the Lower House, yet to be created, where it can be debated for a minimum of 10 and a maximum of 40 sessions.

On activity indicators, CAGED (formal job creation) registered a net destruction of 43k jobs in March, well below our call (+44k) and the market’s (+80k). Seasonally-adjusted, 8k formal jobs were destroyed in the month, slowing the 3-month moving average to 16k (from 31k in the previous month). The sectoral breakdown shows gains in services and retail sectors, while construction registered a decline in the period. All in all, the labor market continues to face sluggishness in early 2019, consistent with other activity indicators.

Argentina

Day Ahead: The trade balance for March will come out at 4:00 PM. A weak currency and contracting internal demand are leading to trade surpluses. We forecast a surplus of USD 500 million in March (versus a USD 550 million deficit registered in the same month of 2018).

Mexico

Day Ahead: At 10:00 AM, INEGI will publish CPI for the first half of April. We expect bi-weekly CPI to fall by 0.19%. Assuming our forecast is correct, headline CPI would accelerate to 4.22% yoy (from 4.06% in the second half of March).



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