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Haddad and Pacheco May Discuss Fiscal Plans On Monday

BRAZIL
  • In a quiet day on the data front, BRL may stay range bound, as the support from higher oil prices is offset by a decline in the price of iron ore. Yesterday, BRL was resilient in the face of stubborn US CPI data, perhaps garnering some support from slightly stronger than expected domestic IPCA inflation data, which limits the scope for the BCB to accelerate rate cuts any time soon. A further 50bp rate cut at the Jan 31st policy meeting continues to be on the cards.
  • On the political front, the focus is still on the negotiations between the government and Senate over the government’s plans to increase payroll taxes on 17 sectors. CNN Brazil reports that Finance Minister Haddad and Senate leader Pacheco will discuss this on Monday.

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