Petrobras, Brazil markets sink on Lula report

• Brazil's financial markets were routed today after a news report that former President Luiz Inacio Lula da Silva could be arrested as part of the sweeping corruption scandal involving Petrobras (PBR -4.7%).
• Investors were spooked by a report that a habeas corpus legal filing had been made on behalf of Lula to protect him from unlawful arrest in the corruption investigation; spokespersons later said the proceeding had not been filed by the ex-president or his representatives and that they had no prior knowledge of it.
• Also, Brazil's non-seasonally adjusted jobless rate rose in May to 6.7%, the highest since 2010, from 6.4% in April, reinforcing worries that the country is on the verge of a recession.
• Also: PBR.A -5%, VALE -3.6%, EBR -4.5%, ELP -2.5%, CIG -4.6%, CPL -2.6%, SBS -2%, BSBR -2.5%, BBD -1.1%, ITUB -2.7%.
• ETFs: EWZ, BRF, BRZU, EWZS, BRXX, BRAQ, BZQ, BRAZ, BRAF, UBR, DBBR, FBZ