MNI: US Consumers See Lower Inflation, Better Jobs - NY Fed

MNI BRIEF: Risks To Growth Evident, Await Dec Forecasts -Rehn

MNI China Daily Summary: Tuesday, November 12

MNI BRIEF: Prolonged Tightening If Expectations Worsen - BCB

MNI: PBOC Net Injects CNY107.2 Bln via OMO Tuesday

MNI: PBOC Sets Yuan Parity Higher At 7.1927 Tues; +1.32% Y/Y

EZ/UK Bond Supply Calendar: IT, UK, DE, PO Auction Wednesday

MNI: US REDBOOK: NOV STORE SALES +4.8% V YR AGO MO

MNI: CANADIAN SEP BUILDING PERMITS +11.5% MOM

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

MNI EXCLUSIVE: German Turmoil Dashes EU's Joint-Funding Hopes -Officials

FED: Powell's Time Looks Up, Replacement Could Be Less Willing To Cut Rates?

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

BRAZIL: Swap Rates Rise Further As Lula Still To Commit To Spending Cut Plan

BRAZIL
EM BulletBulletGlobalEmerging Market NewsRegion
  • The Brazilian real and DI swap rates have remained under pressure today, as the market continues to wait for details on the government’s spending cut plans. USDBRL remains 0.6% higher on the day, while 2Y swap rates have risen by 9bp.
  • Bloomberg reports that President Lula has several proposals to cut spending to consider, but is hesitant to carry out a plan that would impact the poor, according to people familiar with the matter. Lula will not speed up the process to soothe market concerns, they said. One proposal is said to include automatic spending containment measures if any mandatory expenditures rise more than 2.5% above inflation per year. A second proposal would only include some programmes under the rule.
  • Amid ongoing fiscal uncertainty, inflation expectations rose for a sixth consecutive week in today’s Focus survey. Meanwhile, more analysts are forecasting a longer BCB hiking cycle, with Legacy Capital today saying that the BCB will have to step up to a 75bp pace, taking the Selic rate closer to 14% to address rising inflation pressures.
173 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.
  • The Brazilian real and DI swap rates have remained under pressure today, as the market continues to wait for details on the government’s spending cut plans. USDBRL remains 0.6% higher on the day, while 2Y swap rates have risen by 9bp.
  • Bloomberg reports that President Lula has several proposals to cut spending to consider, but is hesitant to carry out a plan that would impact the poor, according to people familiar with the matter. Lula will not speed up the process to soothe market concerns, they said. One proposal is said to include automatic spending containment measures if any mandatory expenditures rise more than 2.5% above inflation per year. A second proposal would only include some programmes under the rule.
  • Amid ongoing fiscal uncertainty, inflation expectations rose for a sixth consecutive week in today’s Focus survey. Meanwhile, more analysts are forecasting a longer BCB hiking cycle, with Legacy Capital today saying that the BCB will have to step up to a 75bp pace, taking the Selic rate closer to 14% to address rising inflation pressures.