Further deterioration likely in Brazil's employment

The inaction of Brazil government continues taking its toll on Brazilian assets. 

Any meaningful change is unlikely, risk premia is expected to remain elevated until there is more clarity on how the fiscal situation is going to be addressed. 

"Not only has the government struggled on cutting spending, but revenues continue falling as economic activity collapses. A further deterioration is expected in employment with the unemployment rate reaching 7.9%. Finally, IPCA-15 inflation is forecasted at 0.40% m/m, which implies a y/y reading of 9.6%", says Barclays.