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BRAZIL: DI Swap Rates Extend Gains Following Soft IPCA-15 Data

BRAZIL
EM BulletBulletGlobalEmerging Market NewsRegion
  • DI swap rates are extending gains, with yields in the belly and long-end falling another 14bp on Wednesday, taking the move lower over the last two days to around 40bp. Easing fiscal concerns have played a part, as BCB Governor Campos Neto said yesterday that the market may have overreacted to the fiscal outlook, and today’s lower-than-expected IPCA-15 inflation data have helped to extend the move.
    • As noted previously, Deputy Finance Minister Durigan said that Brazil will keep and comply with the 2024 fiscal target, while Treasury Secretary Rogerio Ceron also said yesterday that the government’s 2024 fiscal result will be better than investor expectations.
    • Ceron said that as much as BRL 10bn of BRL 40.5bn in spending that was excluded from this year’s fiscal target could be cancelled, which would improve the primary fiscal position.
    • Focus now turns to tomorrow’s BCB’s quarterly inflation report for any further clues on the Selic rate path.
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  • DI swap rates are extending gains, with yields in the belly and long-end falling another 14bp on Wednesday, taking the move lower over the last two days to around 40bp. Easing fiscal concerns have played a part, as BCB Governor Campos Neto said yesterday that the market may have overreacted to the fiscal outlook, and today’s lower-than-expected IPCA-15 inflation data have helped to extend the move.
    • As noted previously, Deputy Finance Minister Durigan said that Brazil will keep and comply with the 2024 fiscal target, while Treasury Secretary Rogerio Ceron also said yesterday that the government’s 2024 fiscal result will be better than investor expectations.
    • Ceron said that as much as BRL 10bn of BRL 40.5bn in spending that was excluded from this year’s fiscal target could be cancelled, which would improve the primary fiscal position.
    • Focus now turns to tomorrow’s BCB’s quarterly inflation report for any further clues on the Selic rate path.