Brazil’s Senate yesterday voted with overwhelming majority in favor of impeachment of President Dilma Rousseff. 55 votes in favor of impeachment, while just 22 were against it. Markets have reacted positively, with every move towards her impeachment.

But what now that she is at finally last stage of her full impeachment. She will face six months of investigation and if found guilty could lead to prosecution.

How or rather at what, markets will react to, from here?

One key factor will be Dilma’s actions. After she was impeached yesterday, she staged a large protest with several thousand joining, in support of her and she called it a coup. She said that she may have made mistakes but not criminal activities. “It is our democracy and our constitution that are at stake in this coup and all of our achievements over the past 13 years,” she said. Laike we mentioned yesterday, that she may defy the impeachment and protest of Workers Party around Brazil will continue.

Possibly single most important factor will be the policies of former Vice President Michel Temer, who will be the new acting president. Markets have priced in a marked friendly new government, so there could be major tremors if that hope fails.

Michel Temer, himself has been mentioned many a times in Petrobras corruption scandal and one of country’s top court asked the parliament to open impeachment against him. If the scandals drag him too, Brazil will face new uncertainties.
Brazil’s Bovespa is currently trading around 53780, up more than 40% this year. Real is trading at 3.47 per Dollar, up more than 12% YTD.