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Brazilian treasury bonds now pay 10% per year because of heightened risk perceptions

RIO DE JANEIRO, BRAZIL - Fiscal and political uncertainties have dominated the Brazilian market in recent weeks. Investors are concerned about threats to the spending cap, the main pillar of the country's public finances.

There are new risks, such as the proposal to introduce extended rather than immediate payment of federal judicial debts, and to create a new, topped-up Bolsa Família (aid for the poor) in an election year. There is also growing friction between President Jair Bolsonaro and the Supreme Court (STF), which could lead to an institutional crisis.

This combination of political and fiscal noise has . . .

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