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BRAZIL: BofA Survey Reveals Short-Lived BCB Tightening Cycle Expected

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  • According to Bloomberg, the latest BofA Latam fund manager survey shows that the BCB is expected to hike the Selic rate to a range of 10.75%-11.50% by the end of this year and to keep the policy rate in a double-digit range until the end of 2025. Fund managers are also divided on the outlook for BRL, with participants split over USDBRL ending up in a 5.11-5.40 range and a 5.41-5.70 range next year.
  • Meanwhile, BofA expects the Selic rate to reach 11.75% this year, with a 25bp hike tomorrow and then two 50bp adjustments. They then see a final 25bp hike in January 2025, before cuts start potentially from September next year.
  • On the equity front, the fund manager survey shows that many respondents expect the IBOVESPA to end next year in the 130,000-140,000 range, according to Bloomberg, straddling the current level of ~135,000. Less than a quarter of fund managers expect the index to rise above the 150,000 level.
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  • According to Bloomberg, the latest BofA Latam fund manager survey shows that the BCB is expected to hike the Selic rate to a range of 10.75%-11.50% by the end of this year and to keep the policy rate in a double-digit range until the end of 2025. Fund managers are also divided on the outlook for BRL, with participants split over USDBRL ending up in a 5.11-5.40 range and a 5.41-5.70 range next year.
  • Meanwhile, BofA expects the Selic rate to reach 11.75% this year, with a 25bp hike tomorrow and then two 50bp adjustments. They then see a final 25bp hike in January 2025, before cuts start potentially from September next year.
  • On the equity front, the fund manager survey shows that many respondents expect the IBOVESPA to end next year in the 130,000-140,000 range, according to Bloomberg, straddling the current level of ~135,000. Less than a quarter of fund managers expect the index to rise above the 150,000 level.