August 09, 2022 09:56 GMT
- The BCB will release the minutes from the August 03 meeting where the Copom hiked the Selic rate by 50bps to 13.75%.
- In a slightly dovish shift, the Copom’s guidance said, “the Committee will evaluate the need for a residual adjustment, of lower magnitude, in its next meeting.” This clearly suggests the end of the cycle is close or may well have been reached, questioning the likelihood of a cycle ending September hike.
- The full MNI review of this decision with analyst views can be found here: https://roar-assets-auto.rbl.ms/documents/17836/MNI%20BCB%20Review%20-%20August%202022.pdf
- *Barclays will look for further details on the board’s decision to focus on inflation forecasts for Q1’24, instead of the traditional year-end ones, due to the volatility caused by tax changes, as well as its assessment of inflationary risks based on the latest fiscal and external developments.
- *Goldman Sachs will be looking first and foremost for hints on the set of conditions that could lead the Copom to judge as warranted a final 25bp rate hike at the September meeting, particularly against a backdrop of solid above-trend 1H2022 real growth dynamics, rapid tightening of the labor market backdrop, additional sizeable fiscal stimulus (part of which is unlikely to reverse in 2023), and end-2023 and end-2024 inflation expectations that continue to track above the respective targets.