The Intercept: "Judge Sergio Moro repeatedly counseled prosecutor Deltan Dallagnol via Telegram during more than two years of Operation Car Wash"

The Intercept, site of the journalist Glenn Greenwald presented messages exchanges between prosecutors such as Deltan Dallagnol and the then judge and current Justice Minister Sérgio Moro about some investigated issues and possible political motivations of the investigations. The targets of the talks recently reported that they had their cell phones hacked.

According to The Intercept, leaked documents "reveals serious ethical violations and legally prohibited collaboration between the judge and prosecutors who last year convicted and imprisoned former Brazilian President Luiz Inácio Lula da Silva".

Growth forecast for the Brazilian GDP is reduced for the 15th time in a row and now stands at 1%

The financial market's estimate for economic growth in this year reached 1%, after 15 consecutive reductions. This is what the Focus bulletin shows, which is a result of the Brazilian Central Bank's research to financial institutions, released every Monday.

In early 2019 financial institutions, according to this same bulletin Focus, forecasted a 2.6% growth in the Brazilian economy this year. However, this bet on the world of finance was mistakenly based on a very positive judgment of Jair Bolsonaro's ability to lead the country's economy. With the passage of the months, this bet turned out to show that the analyzes were, for the most part, politically charged and not based on more rational forecasts of the Brazilian economic indicators.

For many analysts, Brazil is flirting with a new recession. Domestic demand continues to decline considerably and has lasted for two consecutive quarters. This has already been pointed out by Goldman Sachs.

To make matters worse, according to journalist Denise C. de Toledo, the "Preliminary Employment Indicator (IAEmp) recorded the 4th monthly drop followed in May, according to the FGV. The index fell 6.7 points in May to 85.8 points, the lowest level since June 2016 (82.2 points). Reflection of the expectation of weak expansion of the economy".

Bolsonaro's idea of creating a single currency for Brazil and Argentina is harshly criticized by economists

In his visit to Argentina, Brazilian President Jair Bolsonaro said that he and the Brazilian Economy Minister, Paulo Guedes, are starting the debate on the achievement of the "dream of a single currency in the Mercosur region, the real peso".

Bolsonaro's speech, which occurred last Friday (07.Jun.2019), was widely criticized in Brazil. The president of the Chamber of Deputies, Rodrigo Maia, has published in his Twitter account: "Is it? Will it devalue the real? Will the dollar end up worth R $ 6.00? Coming back inflation? Hope not".

Gustavo Franco, former president of the Brazilian Central Bank and one of the parents of the Real Plan, criticized the idea of creating a single currency between Brazil and Argentina. According to Thomaz Favaro, the Latin American director of Control Risks, the 'real peso' would bring exchange problems from Argentina to Brazil

Economic journalist Miriam Leitão was quoted as saying: "The possibility of a monetary union between Brazil and Argentina is none." For her, the countries are very different. According to Míriam Leitão, "Brazil has US$ 380 billion in reserves and balanced external accounts, Argentina depends on IMF loans to meet its exchange rate commitments. They have 55% inflation and we are returning to 4%."

The idea defended by Bolsonaro and Guedes also became the target of dozens of memes on the internet. Some people have even argued that the name of the new currency should be "surreal".

Foreigners take out R$ 4 billion and Stock Exchange (Bovespa) in Brazil, says InfoMoney

According to InfoMoney website, the foreign balance on the Bovespa was negative at R$ 4.16 billion until May. For InfoMoney, foreign investors are hesitant about Brazil. They do not want to take positions in the country before the political and economic framework shows some progress.

Construction costs in Brazil grow 0.11% in May

The National Civil Construction Index (Sinapi), released today by IBGE, grew by 0.11% in May, a result below 0.34% in April. This is the lowest rate since November 2016, when it stood at 0.10%.

The share of labor research, with a decrease of 0.21%, influenced the national index.

Nationally, the average construction cost in May of 2019 was R$ 1,131.89, of which R$ 592.48 related to materials and R$ 539.41 to labor. Compared to April, labor fell by 0.21%, while materials rose by 0.39%.

Crisis in the Brazilian industry

According to the Annual Industrial Survey, published by IBGE, the Brazilian industry cut 1.1 million jobs between 2014 when the country officially went into recession, and 2017 – a decrease of 12.5%. The remaining vacancies had wages cut by 14.7%. In addition, Brazilian industry revenue fell 7.7% in the period. Between 2008 and 2017, the segments that lost most jobs were mining coal (-38.7%), manufacturing of petroleum products and biofuels (-32.9%) and manufacturing of wood products ( -22.4%).

The Brazilian industry suffers from the economic crisis that affects Argentina and the decrease in the rhythm of sales of products to the United States. These countries are big buyers of Brazilian industrial products: vehicles, engines, parts, machines, airplanes, according to analyst Vinicius Torres Freire.

Cost of living in Brazil: inflation slows down in May 2019

According to IBGE, official inflation in Brazil slowed down to 0.13% in May 2019. It is the lowest result for May since 2006 (when the index was 0.10%) and the lowest monthly index of the year. In 12 months, accumulated Extended Consumer Price Index (IPCA) declined to 4.66% but remains above the center of the target set by the government for 2019, which is 4.25%. The exchange rate returned below R$ 4.00 and economic growth is still stagnant. This leads many analysts to bet on an interest rate cut by the Brazilian Central Bank.

The fall in the index was influenced by the deflation of 0.56% in the price of food and beverages. On the other hand, raised housing prices, which rose 0.98%. Health and personal care were also villains in the month, up 0.59%. Fuel expenses also weighed more on Brazilian families' pockets in May. Gasoline, for example, increased 2.60% in the period.

Bovespa B3 opens higher today after the Ibovespa closed down yesterday

The main indicator of the São Paulo Stock Exchange, B3, opened higher today (06.Jun.2019), after having retreated more than 1% the day before. The recovery occurs because of the relatively benign scenario abroad.

Yesterday, Ibovespa had shown a fall due to new disagreements between the National Congress and the government of Jair Bolsonaro. The approval of the supplementary credit, aimed at allowing the government to continue to spend above the spending ceiling, was postponed again. This left the Brazilian financial market nervous and the reaction was a downturn on the Stock Exchange (Bovespa). Yesterday, the Ibovespa had a 1.75% drop, the highest since May 16, 2019.

Another factor that displeased the Brazilian financial market was the announcement of possible distancing of the current government from liberal policies. Yesterday, according to Bloomberg, the government of Jair Bolsonaro assumed that it could demand further flexibilization of the limit of public expenses after the ordeal of the Pension Reform. That would throw down the commitment of the minister Paulo Guedes's team to fiscal balance.

Brazil murder rate is one of the biggest in the world in absolute terms

Brazil had 65,600 murders in 2017, reveals Atlas of Violence by Ipea and the Brazilian Forum of Public Security. The survey considers records of the Mortality Information System, produced by the Ministry of Health.

The report warns of violence against youth, blacks, women and the LGBTI + population.

75% of homicide victims in Brazil in 2017 were black, according to the Atlas of Violence. Within a decade (from 2007 to 2017), the rate of blacks murdered rose by 33.1%. The murder was also the cause of half of the deaths of young people in Brazil in 2017.

This was the first time the Atlas of Violence included statistics on violence against the lesbian, gay, bisexual, transgender, transvestite and intersex population.

Another report produced by the Indian Missionary Council (CIMI) analyzed in 2018 data for the year 2017. The CIMI report also showed an increase in violence against indigenous peoples in Brazil. In cases of indigenous murder, the year 2017 registered 110 cases.

Brazil is also a country where there is a lot of violence against journalists. In 2018, the index increased by 36%, according to a report by the National Federation of Journalists (Fenaj). According to a survey, 227 journalists were verbally or physically attacked. 64 journalists were killed in their practice in Brazil between 1995 and 2018, according to a report by the Public Prosecutor's Office.

According to the magazine Superinteressante, Brazil has had more homicides than all of these countries in 2015: USA, Canada, Morocco, Algeria, Tunisia, Libya, Egypt, China, Mongolia, Malaysia, Indonesia, Australia, New Zealand, South Korea, Belgium, Netherlands, Luxembourg, Germany, Italy, Switzerland, Denmark, Norway, Sweden, Finland, Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Austria, Hungary, Belarus, Ukraine, Romania, Moldova, Bulgaria, Slovenia, Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Albania, Greece and Macedonia.

Caixa reduces interest rates in an attempt to rekindle the Brazilian real estate market

Caixa, the Brazilian state-owned bank and one of the five largest banks in the country, announced today (5.Jun.2019) the reduction of interest charged on real estate financing and the equalization of the rates practiced in the SFH (Housing Financial System) less than R$ 1.5 million – and in the SFI (Real Estate Financial System) – for higher value properties.

Now the two systems will practice rates ranging from 8.5% per year to 9.75% per year. Interest on the SFH (which also allows the use of FGTS funds) now ranges from 8.75% per year to 9.75% per year. In the SFI, they range from 9.75% to 11%.

For customers who do not have a direct relationship with the institution (counter), the maximum rate went from 11% per year to 9.75%.

The FGTS is an account intended for Brazilian workers. It's a cash reserve. Practically, a saving. The fund seeks to ensure the worker in difficult situations, such as dismissal without just cause and also in the acquisition of a property. The FGTS is a right guaranteed by the Brazilian Federal Constitution that every employer pay monthly.

The financial market in Brazil continues to believe in the economic team of the current government, even with the continuous negative results of the economy in 2019

Speaking at the Finance and Taxation Commission of the Chamber of Deputies, Brazil's economy minister, Paulo Guedes, defended the pension reform as the only way to reposition the country on the path of growth. The speech was viewed positively by the Brazilian financial market. Guedes said that it is necessary to disinfect the public machine and "slow down hiring" of more public servants.

The minister's speech was well received by the financial market, so much so that at the end of yesterday (04.jun.2019) the Stock Exchange (Bovespa) closed close to the high of the day. Therefore, Brazilian financial actors continue betting on the economic team of the current government, even after the continuous negative numbers of the economy.

As I have already written here, "the truth is that the Brazilian Financial Markets (analysts and economists) and the Brazilian businessmen bet very high on a government that was not able to respond to the height to that bet".

Many analysts and economists continue to make the same error of analysis and do not see or do not want to see the undeniable distance between the speech and the actual capacity of the current government to deliver reforms and public policies capable of taking Brazil out of the crisis.

Guedes again confuses some things. The creation of a digital government, where some services are being offered via the internet, does not necessarily mean hiring fewer public servants. When compared to other OECD countries, the level of public servants in Brazil is much lower than in most other countries. The country lacks, for example, the necessary number of doctors, teachers, and police to meet the basic needs of the country.