Brazil’s stocks led world gains and the real rallied as traders bet that a change in government may be closer than ever after months of political gridlock that has prevented lawmakers from focusing on kick-starting the stalled economy and closing a crippling budget gap.
The rally was triggered by news that former President Luiz Inacio Lula da Silva was detained for three hours after heavily armed police raided his home in a sweeping corruption probe, fueling speculation that support will grow to impeach his successor, President Dilma Rousseff. While markets have been split in the past about whether a Rousseff ouster would be good or bad, many now say it may be the only way out of the political quagmire.
