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BRAZIL: USDBRL Steady As Lula Meets Ministers On Spending Cut Plan

BRAZIL
BulletEM BulletEmerging Market News
  • The Brazilian real is lagging the move in Latam FX Monday as the market continues to await news on the government’s spending cut plan. As noted earlier, President Lula is meeting with members of the government’s economic team today, including Finance Minister Haddad, to discuss the final version of the plan. According to local media, Haddad expects that after today’s meeting, the announcement will happen by tomorrow.
    • Considering the limited time for the approval of measures before the year's end, JP Morgan continues to believe that structural measures that may be announced soon are unlikely to be fully approved this year.
    • USDBRL has dipped by 0.25% to around 5.79, keeping the pair towards the top of the recent range. Support to watch lies at 5.6755, the 50-day EMA, while key resistance and the bull trigger is at 5.8750, the Nov 1 high.
    • Following the increase in 2025 Selic and CPI expectations in today’s BCB Focus survey, front end DI swap rates have risen slightly on the day, while long-end yields have fallen with the move in UST’s. Data wise, attention turns to mid-month IPCA inflation figures due tomorrow.
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  • The Brazilian real is lagging the move in Latam FX Monday as the market continues to await news on the government’s spending cut plan. As noted earlier, President Lula is meeting with members of the government’s economic team today, including Finance Minister Haddad, to discuss the final version of the plan. According to local media, Haddad expects that after today’s meeting, the announcement will happen by tomorrow.
    • Considering the limited time for the approval of measures before the year's end, JP Morgan continues to believe that structural measures that may be announced soon are unlikely to be fully approved this year.
    • USDBRL has dipped by 0.25% to around 5.79, keeping the pair towards the top of the recent range. Support to watch lies at 5.6755, the 50-day EMA, while key resistance and the bull trigger is at 5.8750, the Nov 1 high.
    • Following the increase in 2025 Selic and CPI expectations in today’s BCB Focus survey, front end DI swap rates have risen slightly on the day, while long-end yields have fallen with the move in UST’s. Data wise, attention turns to mid-month IPCA inflation figures due tomorrow.