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IPCA Inflation Data Due Tuesday As Speculation For Larger BCB Cut Mounts

BRAZIL
  • The latest set of IPCA inflation figures will be published tomorrow, where the annual rate is expected to decline to 3.15% Y/y. The data will likely provide further evidence that the BCB will commence an easing cycle at the August 02 meeting. Digital options negotiated at B3 show traders split between a 25bps or a 50bps move.
  • Local assets were buoyed on Friday following Brazil’s lower house approving a proposal to overhaul the country’s complex tax rules. Valor reported that the government freed 8.65 billion reais in spending to be controlled by lawmakers last week to pave the way for approval. Tax reform now goes to Senate whose President Rodrigo Pacheco wants to make changes to the original text, according to Valor.
  • Countries that border the Amazon rainforest need to have a bigger voice in the international climate debate and greater representation on global environmental forums, Brazil’s President Luiz Inacio Lula da Silva said.
  • Petrobras officials expect to fall short of the government’s goals to slash natural-gas prices by 40% because of the high cost of extraction in ultra-deep waters, according to people familiar with the matter.

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