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BRL Firms 1.7%, USDBRL Eyes 5.20 Support

BRAZIL
  • Brazil the clear outperformer following the Copom decision overnight and extending recent appreciation. Weakness in the broad dollar indices assisting the move as well as broad EMFX optimism. DI Swap rates are seen lower between 4-7 basis points in line with Real gains.
  • A lack of meaningful technical support has paved the path of least resistance lower for USDBRL. Our most notable support resides at 5.2145, the 76.4% level of the Dec - Mar rally. This also ties in with the low from Mid-January at 5.1923.
    • USDBRL down 1.65% at 5.2691
    • BRLMXN up 1.51% at 3.838
    • Bloomberg Dollar Index down 0.31% at 1128.78
    • JPMorgan EM Ccy Index up 0.58% at 57.359
  • Local Equity Index:
    • Brazil Ibovespa down 472.2 points (-0.39%) at 119123.8
  • Brazil DI Swaps:
    • 2-yr -5 bps at 6.45%
    • 5-yr -7 bps at 8.22%
    • 10-yr -4 bps at 9.06%

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