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Fasdal: Brazil on the brink so beware

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The Brazilian real is at its weakest point against the US dollar. Saxo's Simon Fasdal warns that this could have serious implications on debt issued in USD which could hurt Brazilian companies. These include Petrobras and the telecoms giant, Oi. Simon says these companies' bonds are trading at very distressed levels. 

He warns that the situation could not only spread to other Latin American countries but to global markets and in particular equities. He advises investors to be cautious in the short term but he thinks there may be opportunities in the medium term. 

He says Brazil could be in a similar situation to Russia in December/January where bond markets fluctuated and yields shot up but this was followed by a strong rally. If it's a similar situation in Brazil, Fasdal believes investors should look at corporate bonds and explains why.