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BRL Seen 0.6% Lower, Front-End DI Swap Rates Fall 25Bps

BRAZIL
  • USDBRL is slightly higher at the open following the BCB decision/statement on Wednesday signalling a future reduction in the pace of policy tightening. Swap rates in the front-end and belly of the curve are also falling – Di Contracts expiring in Jan’23 are roughly 23 basis points lower.
  • Luiz Inacio Lula da Silva spoke in an interview with Rede de Radios Parana earlier today:
    • We need china to buy from brazil
    • Brazil needs a predictable economic policy
    • Says a president has to hear governors, mayors
    • Says he plans new program of infrastructure investments
    • We won't keep fuel prices dollarized (All BBG)
  • Treasury auctions fixed-rate LTN local notes due 2023, 2024 and 2025; fixed-rate NTN-F local notes due 2029 and 2033.

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