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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessFiscal Target Adjusted, Ongoing Concerns Weigh on BRL
- Yesterday’s 2025 Budget Guidelines Bill confirmed that the government will target a 0% of GDP primary fiscal balance next year, down from the original 0.5% of GDP surplus target. The bill also establishes guidelines for the minimum wage, which will be set at BRL 1,502 in 2025 (vs. BRL 1,412 currently). The bill will now be voted on in Congress. Itaú currently forecast a primary deficit of 0.9% of GDP next year, worse than an expected 0.6% deficit this year, while JP Morgan view the moving of the fiscal target unfavourably and believe that it reinforces a more bearish asymmetry to their medium-term fiscal forecasts.
- BRL underperformed yesterday on the back of the ongoing fiscal concerns, with BCB President Campos Neto saying that it is not ideal to change the fiscal goals. He added that if trust in the fiscal anchor is lost, then it would affect monetary policy. However, on a medium-term basis, he said that BRL is much more in line with peers and that the country’s trade surplus is helping to stabilise the currency.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.