Research Team at BBH, notes that the Brazil’s PMDB decided at its national board meeting Tuesday to formally leave the ruling coalition with Rousseff’s PT. Key Quotes “Some expected the PMDB to be split on the matter, but the vote to leave only took ten minutes to complete. Now attention turns to the impeachment process, and we warn that it will not go as quickly or cleanly as markets seem to be pricing in. We do not think Rousseff and Lula will go quietly, and Vice President Temer of the PMDB comes with his own set of baggage. Meanwhile, the economic data continue to deteriorate. Brazil reported a terrible central government budget deficit for February of -BRL25.1 bln, nearly double the -BRL13.6 bln expected. It reports consolidated budget data today, where there are clearly upside risks to the primary deficit of -BRL10.7 bln that is expected. No matter what happens in the political sphere, we do not think Brazil can avoid further rating downgrades.” For more information, read our latest forex news.