Parliamentary assembly is in adjournment until February, resulting Brazilian assets a brief halt from the political turmoil, as no traces of any developments in the process of President Rousseff's charges, House Speaker Cunha's corruption investigation, or fiscal reform measures.

Last week, Congress approved a primary surplus target of 0.5% of GDP but below the level proposed by Finance Minister Joachim Levy, as a result he quits the chair.

The government appointed former Planning Minister Nelson Barbosa as the new finance minister. Markets might react negatively, as Mr. Barbosa is not seen as fiscally conservative and business friendly as Levy.

In terms of data, the most important release will be the Quarterly inflation report on December 23. It will provide updated forecasts by the central bank and might offer some guidance on the future path of monetary policy.

Relatively to the previous report, we expect more deterioration in the inflation forecasts by the BCB, given the upward trajectory of inflation expectations and the incorporation of worse fiscal assumptions.

We expect no increase in the Selic rate in the months to come, although the market is pricing a very aggressive tightening aimed at containing inflation expectations, regardless of the recession.

The heightened uncertainty about the fiscal consolidation and no progress on the political front amid a deepening recession will likely continue to weigh on the BRL.

We expect USDBRL to reach 4.0 by year-end and 4.5 in 2016, hence, we recommend it is better to go long in 1 ATM call and (1%) OTM call and simultaneously short 1 lots of ITM call with shorter expiry in the ratio of 2:1.

The lower strike short calls to reduce the cost, this would help in purchasing of the greater number of long calls (ATM calls are overpriced, so we chose 1% OTM calls as they have lesser delta but more upside potential in underlying pair) and the position is entered for no cost or a net credit.