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DI Curve Dis-inverts Following BCB Statement

BRAZIL
  • Following the BCB decision/statement on Wednesday, the DI curve bull steepened from its inverted state. Jan-23 DIs fell around 25 basis points with the belly of the curve shifting around 10bps. Further out the curve remained broadly unchanged. Some initial BRL weakness was well supported with USDBRL remaining on the backfoot below 5.30.
  • Domestic focus continues to be on the government’s attempt to pass a bill allowing a reduction on fuel taxes without any fiscal compensation, which would impact the country’s fiscal outlook.

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