January 19, 2023 12:26 GMT
Local Assets Come Under Further Pressure Amid Lula Comments
- Poorer sentiment across global markets is weighing on Brazilian assets again on Thursday with the gaps at the open being exacerbated by President Lula’s comments on the central bank.
- Potentially downplaying the importance of central bank independence, he said: “there was a lot of discussion in this country to have an independent central bank, believing that it would be better. It’s silly to think that an independent central bank governor is going to do more than when the president appointed him.”
- Additionally, Lula pointed out that, even with an independent bank, interest rates and inflation are high in the country.
- The BCB’s February 01 meeting has gained interest following the announcement of new fiscal measures from Finance Minister, Fernando Haddad. Furthermore, these comments and any associated pressure to reduce the key rate are likely to be the main short-term headwind for the currency.
- BCB President Roberto Campos Neto is scheduled to speak in US at 2.30pm ET. and traders will watch to see if he comments on Lula’s remarks.
- Brazil November National unemployment rate dipped to 8.1%; Est. 8.1% (BBG)