My bookmarks

Pins are saved using cookies. Deleting them from your browser will delete your preferences.


Consequence of a corruption scandal involving the actual Brazilian president

23 May 2017

Political risk was back last week, and this time it is not coming from Europe. Donald Trump is being attacked on 2 fronts:

  • He reportedly asked James Comey, former head of FBI (fired by Trump since then) to stop investigating on Michael Flynn (former National Security Adviser), this is an obstruction of justice
  • He reportedly shared classified information with Russia via Sergueï Lavrov (the Russian Foreign Minister)

Market reaction has been quite dramatic on Tuesday and Wednesday, US 10 years yield dropped 20bps, Yen shot up 3% (which penelized us) and equities were down 3%. Markets have been coming back since then, mainly because of a video showing James Comey declaring he was never asked such thing. In short, markets needed an excuse to correct after several weeks of euphoria. To our eyes, it does not change the big picture and the trend is still there. We think as well that the chance to see Trump impeached is very low, just like fiscal reform by the way…

The second political stress last week was coming from Brazil, with President Michel Temer being involved in a bribery scheme (he said “great” when a CEO told him he was paying off two judges and he reportedly took bribes from a company between 2010 and 2015). Market reaction was huge with Brazilian equities down 10% and the currency down 7%... Next step should be Michel Temer out and possibly millions of people in the street with new elections.

On the macro side, not much highlights for markets:

  • Portuguese GDP at 2.8%, above expectations
  • Average US data (Philadelphia Fed above, but real estate disappoints)
  • Chinese data was slightly disappointing, especially industrial production. Retail sales were broadly in line
  • Last, French unemployment rate at 9.6%, lowest since march 2012. The former president François Hollande managed to make unemployment rate go down during his tenure

More about:

The information and material provided do not, by any means, represent advice, offers, solicitations or recommendations for investing in specific investments. All statements reflect the opinions of their authors at their publication date and do not constitute a contractual commitment on behalf of the management company. These assessments are subject to change without notice, within the prospectus’ limitations, which is the only legally binding document. La Française Group declines liability in any form for any direct or indirect damage resulting from the use of this publication or the information that it contains. This publication may not be reproduced in full or in part, disseminated or distributed to any third party without the prior written consent of La Française Group.  
La Française Allocation is a French UCITS in regards to the 2009/65/CE Directive. The Fund received AMF authorization on July 15th 2003 and was launched on July 31st 2003. The strategy changed as of July 19th 2012. Management company : La Française Asset Management – Paris – approved by the “Autorité des Marchés Financiers” under N GP97076 on July 1st, 1997.

For more information regarding the French regulatory authority - Autorité des Marchés Financiers (AMF) – please visit

La Française Group provides access to the expertise of a number of asset management companies around the world. To provide you with the most relevant information, we have developed an interface to present the full range of products available for your investor profile and country of residence.

Present yourself


Your country of residence

Your language

Your profile

By continuing browsing on this website, you accept the use of cookies and other tracing devices s as to allow you to receive information suited to your profile, facilitate information sharing on social networks, guarantee the best browsing experience possible and to create statistics. To find out more, we invite you to consult our Privacy and Cookies policy. Find out more.