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Local Yields Continue To Head North

BRAZIL
  • Sustained pressure on Di Swap rates last week with the long end of the curve shifting roughly 60 basis points higher. Continued inflationary pressures evident in the latest BCB focus survey this morning where economists now forecasts 7.58% year end inflation, further contaminating medium term expectations with 2022 year-end expectations at 3.98%.
  • Economists now predict a year-end Selic rate of 7.63%, revised up from 7.5%.
  • Thursday's IPCA inflation data may prove crucial for the trajectory of local swap rates, as well as political developments following tomorrow's holiday and impending social demonstrations.
  • Today, Treasury auctions of inflation-linked NTN-B local notes due 2024, 2028 and 2040.

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