CANADA TO PUBLISH FISCAL UPDATE ON DEC. 16

MNI BRIEF: Inflation Expectations Tick Higher - NY Fed

MNI BRIEF: China Passenger Car Sales Up In November Y/Y

MNI BRIEF: Mexico Inflation Down To 4.55% In November

MNI China Daily Summary: Monday, December 9

MNI BRIEF: China To Strengthen Policy Easing In 2025: Poliburo

MNI:US OCT WHOLESALE INV 0.2%; SALES -0.1%

EZ/UK Bond Supply Calendar: Austria, UK Auction on Tuesday

MNI BRIEF: China Nov CPI Slows To 5-Month Low Of 0.2% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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

Capital Economics Forecast USDBRL To Strengthen To ~6.00 By End-2022

BRAZIL
  • Fiscal risks do not look likely to improve over the next 12 months as the Presidential election draws closer. With President Bolsonaro behind in the polls, Capital Economics think that it is unlikely that the government will enact the fiscal austerity required to improve the country’s debt situation. What’s more, there are few signs that austerity is a priority for the other main candidate in next year’s election (former President Lula) either.
  • “And while at first glance the stabilisation of the situation in China may seem like a positive for the real, we think it will provide limited support. We expect stimulus from the PBOC to slow the decline in China’s economy rather than reverse it, and so we doubt that a rebound of the real fuelled by rising commodity prices is on the cards. Indeed, we forecast that the price of iron ore will continue to decline, as the outlook for property construction in China remains bleak.”
  • Overall, while there are signs that much of the bad news is already discounted – proxies for risk premia are already very high, and that some of the headwinds from the last 6 months are becoming less severe, Capital Economics doubt that a sustained rebound in the real is likely in the run-up to the election. When combined with their negative outlook on industrial metals, they think that the real will remain under pressure next year; forecasting it will weaken, to ~6/$ by end-2022.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

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.