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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.
MNI BCB Preview - October 2022
MNI BCB Preview - October 2022
Executive Summary
- After holding rates in September, the consensus view remains that the Copom has ended its tightening cycle. Despite two members voting for a 25bp hike at that meeting, MNI expects a unanimous decision to keep rates unchanged this week at 13.75% as both IPCA readings and inflation expectations continue to moderate.
- With the global inflation outlook remaining difficult, continued hawkish rhetoric from the central bank should accompany the decision.
- Additionally, domestic uncertainties relating to this Sunday’s second-round presidential election vote and associated concerns around the fiscal trajectory provide solid evidence of needing to maintain the restrictive stance.
- Updated inflation forecasts may also provide some clues as to when the Copom might begin monetary easing next year.
Click to view the full preview: MNI Brazil Central Bank Preview - October 2022.pdf
Disinflation Process Continues, Expectations Are Easing
October IPCA headline inflation saw another notable decline to 7.17%, marginally above the surveyed median estimate of 7.12% but considerably below the September reading of 8.73%, Furthermore, the latest BCB Focus Survey has seen forecasts be further adjusted to the downside, with year-end 2022 estimates now sitting at 5.60%. This is down from the 6.00% prediction before the September meeting. Additionally, year-end 2023 expectations have also declined, falling from 5.01% to 4.94%, continuing the improvement for medium-term expectations.
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.
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