Citing brighter prospects, Moody's revises Brazil outlook to stable

Moody’s surprised the market and revised Brazil’s outlook to “stable” from “negative,” citing economic stabilization, lower inflation, improving fiscal prospects and a healthier Petrobras. The rating remains at “Ba2,” two steps below investment grade. Samar Maziad, chief analyst for Brazil, doesn’t rule out further political turmoil linked to the Petrobras scandal hurting the outlook. Nonetheless, the impeachment seemed to have cleared the path for wider reforms, she says. Banco Votorantim economist Roberto Padovani says the credit-rating agency only consolidated a market perception that had already been priced in as the Michel Temer government reached power.