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BRAZIL: Analysts Expect 75bp Selic Rate Hike Next Week

BRAZIL
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  • While USDBRL remains 1.7% higher on the day, around 6.07, DI swap rates are outperforming, with yields in the 12-18m segment down by more than 10bp. Long-end yields remain 70bp higher over the last week, amid ongoing fiscal concerns, but earlier today BCB deputy governor Galipolo reiterated the central bank’s hawkish stance, saying that BCB officials are closely following CPI estimates and are open to data in the coming rate meetings.
  • Yields on the DI swap curve continue to sit around the 14% level at the 18-month segment, as analysts have begun to raise their Selic rate expectations. According to the latest survey estimates on Bloomberg, a 75bp rate hike to 12.0% is now expected at the Copom meeting next week.
  • Meanwhile, Valor Economico reports that lower house Speaker Arthur Lira will gather party leaders on Tuesday to decide on the processing of the fiscal package. The government’s whips intend to move forward with the first votes on the package this week, according to local media.
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  • While USDBRL remains 1.7% higher on the day, around 6.07, DI swap rates are outperforming, with yields in the 12-18m segment down by more than 10bp. Long-end yields remain 70bp higher over the last week, amid ongoing fiscal concerns, but earlier today BCB deputy governor Galipolo reiterated the central bank’s hawkish stance, saying that BCB officials are closely following CPI estimates and are open to data in the coming rate meetings.
  • Yields on the DI swap curve continue to sit around the 14% level at the 18-month segment, as analysts have begun to raise their Selic rate expectations. According to the latest survey estimates on Bloomberg, a 75bp rate hike to 12.0% is now expected at the Copom meeting next week.
  • Meanwhile, Valor Economico reports that lower house Speaker Arthur Lira will gather party leaders on Tuesday to decide on the processing of the fiscal package. The government’s whips intend to move forward with the first votes on the package this week, according to local media.