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Campos Neto in Spotlight, Focus Survey Raises Year-End Selic Forecast

BRAZIL
  • The debate about Brazil’s central bank inflation target for next year has been the main local market driver over the last few weeks.
  • BCB President Roberto Campos Neto was interviewed by journalists for a TV show called “Roda Viva” that will air today at 2000ET. Market participants will be particularly interested in comments on President Luiz Inacio Lula da Silva’s repeated criticism of the bank’s tight monetary policy due to its impact on growth.
  • Lula is also expected to speak as he takes part in events today including the Worker’s Party anniversary.
  • In the BCB’s latest Focus survey of economists, the 2023 & 2024 Selic forecasts have been raised by 25bp to 12.75% and 10.00% respectively. Additionally, inflation forecasts were increased across the entire horizon:
    • 2023 year-end inflation raised to 5.79% from 5.78%
    • 2024 year-end inflation raised to 4.00% from 3.93%
    • 2025 year-end inflation raised to 3.60% from 3.50%
  • A light week for local economic data releases, with December economic activity, due Thursday, highlighting the docket.

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