Odds on $EWZ Retesting Pre-Election Highs by Q3 End
Been looking at $EWZ lately, specifically its resilience given global headwinds. It's holding around the $35.89-$36.25 range today, which is a key pivot point for me. We're seeing some sustained domestic policy optimism despite the broader risk-off sentiment elsewhere. Brazil's inflation print was softer than expected last week, opening some room for the BCB to potentially ease sooner than priced in. This could provide a tailwind for equities.
My take is there's a roughly 60-65% chance $EWZ retests its pre-election highs, around the $40 mark, by the end of Q3. The reasoning hinges on continued foreign capital inflow if rate differentials remain attractive and commodity prices don't completely tank. Any significant uptick in global growth, even marginal, would likely disproportionately benefit EM plays like Brazil. The main risk, obviously, is a severe global recession or an unexpected domestic political shock, but the current macro setup, though fragile, seems to lean slightly bullish for this particular index in the medium term.