Brazil’s president faces toughest fight for survival

Brazil's President, Dilma Rousseff, rushed to be by the side of her predecessor, Luiz Inacio Lula da Silva, over the weekend after the former leader became the most high-profile subject of the corruption investigation into the state-run oil firm, Petrobras.

Rousseff flew to visit her former mentor and close ally at his Sao Paolo-area home on Saturday, a day after Lula was detained by police for roughly three hours of questioning. Police searched Lula's home, his institute and various properties amid allegations he benefited directly from kickbacks tied to Petrobras.

Lula's shock detention not only strikes a symbolic blow to Rousseff, who is already struggling with the country's worst recession in decades, it could also mark the strongest challenge to her position and her Workers' Party (PT), since she narrowly secured a second term in 2014.

The Brazilian real spiked more than 1 percent against the dollar on Friday as equity markets capped the best week since 2008 with investors betting on the growing likelihood of impeachment. Despite the near-term risks of political uncertainty, the feeling that "anyone but Dilma" could lead the country seems to be driving improved sentiment, according to Capital Economics' Neil Shearing.

The dramatic turn in the investigation, dubbed Operation Car Wash, comes just days after local media reports said that the former PT leader in the Senate, Delcido do Amaral, had struck a plea bargain with prosecutors following his November arrest that directly implicates both Rousseff and Lula in the Petrobras scandal. If that evidence comes to light, Rousseff will be facing her toughest fight for survival. Rousseff, who served as Chairwoman of Petrobras during a number of years when corruption took place, has never been formally accused of any wrongdoing.

Mario Marconini, a Managing Director at Teneo Intelligence has outlined three potential paths that could see the president removed from office