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DI Curve Extends Bull Flattening, Long End Drops ~25 Bps

BRAZIL
  • Despite initial pessimism in the Real, the local currency has recovered and is set to close at it's best levels of the week. In line with Real gains, the DI curve has extended yesterday's bull flattening, with swap rates falling by 25 basis points at the long end. A stronger oil demand outlook and signs of economic recovery in China and the United States has offset concerns surrounding the ongoing pandemic and budget issues in the country. Focus next week will be on the Economic Activity data released on Monday in another light data week.
  • USDBRL down 0.53% at 5.5835
  • BRLMXN up 0.37% at 3.567
  • Brazil DI Swaps:
    • 1-yr -4 bps at 4.65%
    • 2-yr -13 bps at 6.33%
    • 5-yr -23 bps at 8.3%
    • 10-yr -26 bps at 9.14%

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