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BRAZIL
BRAZIL: It's not just the Fed and BoC due up today, but also the Brazilian
central bank, who are expected to trim the SELIC rate by 50bps to an alltime low
of 5.00%. This would be the third consecutive 50bps reduction.
-Another cut to rates today has been relatively well telegraphed by the BCB and
still low inflation expectations and GDP forecasts give the bank sufficient
justification. This prompts focus to turn to 2020 inflation forecasts
(projections sub-4% may suggest further easing) and the board's judgement on
slack in the Brazilian economy.
-Citi this morning cut their Brazilian CPI forecasts, raising downside risks to
their expectations of a 50bps cut today and again in December.
-The recent uptick in the BRL (up just shy of 5% against the USD since
mid-October) followed the progress of pension reform through the Brazilian
senate, which also gives the BCB more room to ease policy.
-The decision is due at 6pm local time (2100GMT/1700ET).