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EMERGING MARKETS: BCB Look Set to Begin Tightening Cycle Next Week

EMERGING MARKETS
  • Brazil (Wed) – Shortly after the anticipated FOMC rate cut, the BCB are now expected to begin a tightening cycle, hiking the Selic rate by 25bps to 10.75%. Deanchored inflation expectations, robust growth and pressure on the exchange rate are likely to be cited as reasons for the hawkish pivot.
  • The BCB’s Focus survey expect three 25bp rate hikes for the remainder of 2024, however, some analysts are forecasting even more aggressive tightening.

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