Free Trial

JPMorgan Stay Overweight Brazil Rates

BRAZIL
  • JPMorgan think rates offer the best risk-reward at this juncture. BRL’s short-term fitted value is consistent with domestic and global risk indicators and doesn't seem to have overshot. However, BRL does not seem to be incorporating significant risk premium at current levels.
  • BRL’s performance ahead is likely to follow global drivers after this week, punctuated by news on cabinet appointments as President-elect Lula's economic policy agenda is revealed.
  • In rates, JPMorgan believe they could see another leg lower if the disinflation process continues, and they stay OW Brazil rates and receiving DI Jan26 (last: 11.50%; entry: 11.67%; target: 10.75%; review point: 12.40%). Real rates are still significantly higher than peers’, core inflation has been losing momentum, and positioning is relatively light.

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.