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Front-end Swap Rates Rise, USDBRL Testing Major Support

BRAZIL
  • USDBRL opened just ahead of 5.02 following the Inflation readings earlier. After an initial pop higher to 5.0426, filling the opening gap, the pair has moved steadily back towards the lows.
  • For reference, yesterday's lows are 5.0217, Monday's lows 5.0188 and the December lows are seen at 5.0107. A break may open up a move targeting 4.8187, Jun 8, 2020 low.
  • Short to mid-end swaps have risen following the data:
    • - 1-yr +4 bps at 5.16%
    • - 2-yr +5 bps at 6.77%
    • - 5-yr +1 bps at 8.06%
    • - 10-yr -1 bps at 8.86%

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