MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

MNI: PBOC Sets Yuan Parity Lower At 7.1043 Mon; -4.74% Y/Y

MNI BRIEF: China’s April Loan Prime Rate Unchanged

CHINA SETS YUAN CENTRAL PARITY AT 7.1043 MON VS 7.1046

MNI China Daily Summary: Friday, April 19

MNI: BAKER HUGHES US RIG COUNT 619; OIL RIGS 511; GAS RIGS 106

EZ/UK Bond Supply Calendar: EU, UK Synd W/C 22 Apr, BoE APF Mon

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

© 1982-2023 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Goldman Sachs on BCB: Expect Hints For A Possible Smaller End-Cycle Hike

BRAZIL
  • Given the recent macro-financial developments and the guidance provided at the March 16 meeting, Goldman Sachs expect the Copom to hike the Selic policy rate by another 100bp, driving the Selic policy rate to 12.75%; further into restrictive territory.
  • GS also expect the Copom to offer open-ended guidance for the June meeting, while hinting at a possible smaller end-cycle hike.
  • In the post-meeting policy statement, more than the conditional inflation forecasts for year-end 2022 against the 3.50% target, we will be paying particular attention to the forecasts for year-end 2023 vis-à-vis the 3.25% target, since in its reaction function the Copom going forward will focus almost exclusively on the 2023 target, making the forecasts at that horizon key to calibrate the pace and cycle-ending terminal Selic rate.
  • Given the very challenging current and prospective inflation backdrop, further deterioration of inflation expectations (particularly for end-2023), intense cost-push inflation pressures and structural bullish commodity outlook GS expect the Copom to leave the door open for another smaller Selic hike at the June meeting.
  • Bringing the long tightening cycle to an end in June (with a moderate rate hike) would be justified in their view by the weak below-trend real GDP growth profile, lagged effects from an already clearly restrictive monetary stance, well bid BRL, and heightened global geopolitical and economic uncertainty amidst high financial volatility.
  • GS expect the Copom to highlight the resilience of the economy during 1Q2022 but to acknowledge the soft outlook for real activity and to recognize the growing dissemination of inflation pressures, including among highly inertial components such as services and core. GS also expect the Copom to discuss the spillover effects on Brazil from the war in Ukraine and underscore the backdrop of uncertainty in an environment of high commodity prices.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

To read the full story

Close

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.