MNI: SPAIN NOV SRVCS PMI 53.1 (FCAST 53.3); OCT 54.9

MNI BRIEF: China Must Quicken Reforms To Boost Domestic Demand

MNI: PBOC Net Drains CNY227 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1934 Weds; -1.91% Y/Y

MNI BRIEF: Fed's Goolsbee Sees Rates Down 'Fair Amount' In '25

MNI BRIEF: December Fed Cut 'Absolutely Not' Off Table - Daly

MNI: AUSTRALIA Q3 GDP +0.3% Q/Q

EZ/UK T-Bill Calendar: Greece, EU Auction on Wednesday

EZ/UK Bond Supply Calendar: UK, Germany Auction on Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

BRAZIL: DI Swap Rates Surge Higher, HSBC Adjust Selic Call

BRAZIL
BulletEM BulletEmerging Market News
  • DI swap rates are underperforming today, with yields up by over 30bp in the belly and long-end, taking the total gain over the last week back above 100bp. The move comes after the government sent Congress the proposed constitutional amendment that makes up part of BRL 71.9bn in spending cuts announced last week. Lower house Speaker Lira is expected to meet with party leaders today to decide on the analysis of the fiscal package, which the government hopes to have approval in both houses by year-end.
    • Yields on the DI swap curve now approach 14.40% around the 2-year segment, pointing to a more aggressive BCB hiking cycle ahead.
    • With analysts raising their Selic rate forecast, HSBC now sees three 75bp hikes in the next meetings, followed by one additional hike of 50bp and another of 25bp, taking the Selic rate to a peak of 14.25% in Q2 2025.
    • This is a substantial upward revision from their previous forecast of a 50bp hike in December and a 12.25% peak in March, motivated by the significant deterioration in both short- and long-term inflation risks. They believe that sustained above-potential growth in Brazil will require a substantial deceleration in activity to ensure price stability.
198 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • DI swap rates are underperforming today, with yields up by over 30bp in the belly and long-end, taking the total gain over the last week back above 100bp. The move comes after the government sent Congress the proposed constitutional amendment that makes up part of BRL 71.9bn in spending cuts announced last week. Lower house Speaker Lira is expected to meet with party leaders today to decide on the analysis of the fiscal package, which the government hopes to have approval in both houses by year-end.
    • Yields on the DI swap curve now approach 14.40% around the 2-year segment, pointing to a more aggressive BCB hiking cycle ahead.
    • With analysts raising their Selic rate forecast, HSBC now sees three 75bp hikes in the next meetings, followed by one additional hike of 50bp and another of 25bp, taking the Selic rate to a peak of 14.25% in Q2 2025.
    • This is a substantial upward revision from their previous forecast of a 50bp hike in December and a 12.25% peak in March, motivated by the significant deterioration in both short- and long-term inflation risks. They believe that sustained above-potential growth in Brazil will require a substantial deceleration in activity to ensure price stability.