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Bolsonaro Approval Plummets

BRAZIL

USDBRL led the global charge up just over 2% at 5.47 on Friday, marching on towards the important resistance area around 5.5160. Rates under severe pressure with yields marching to new highs for the year. Yields were seen higher between 15-21 basis points in the belly and long end of the DI curve.


Heightened restrictions in Sao Paulo may have weighed on sentiment with continued poor liquidity exacerbating the volatility.


Late last week and over the weekend, various polls are indicating a sharp drop in Bolsonaro's approval ratings. Bolsonaro's personal backing tumbled to 26% from 37% in a previous poll published Jan. 14, marking the biggest weekly drop of his presidency.


This morning Brazil economists have raised their forecasts for the Selic Rate:

  • Brazil economists see 3.50% 2021 year-end selic; prior 3.25%
  • Brazil economists see 5% 2022 year-end selic; prior 4.75%

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