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CIBC Do Not Rule Out BCB Surprise in May, Favour Fading USDBRL Move

BRAZIL
  • Although the upward pressure on USD/BRL over the last few weeks has been justified by fiscal risks and the government meddling at Petrobras, CIBS now see local risk fairly in the price.
  • Moreover, the confirmation of lower fiscal surpluses in the coming years and high services inflation will likely keep the BCB on high alert.
  • CIBC do not rule out a cautious surprise (-25bps cut instead of -50bps) in the May meeting, and therefore favour fading the recent move higher in USDBRL.

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