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President Lula Speaks, September Unemployment Rate

BRAZIL
  • President Lula is being interviewed on social media this morning and markets will be paying close attention given the most recent commentary on the fiscal scenario. The speech can be followed here: https://www.youtube.com/watch?v=wP-vf3KzNyY
  • As a reminder, Finance Minister Haddad acknowledged that the fiscal scenario had become increasingly “challenging” on Monday but blamed Brazil’s congress and Supreme Court. He stated that the President had expressed scepticism after hearing about the impact of tax benefits resulting from legislation and judicial rulings that have hurt federal revenue estimates and put the zero-deficit goal at risk.
  • Swap-rate contracts due in January 2026 surged as much as 44 basis points after the remarks and remained roughly 30bps higher on the session. In similar vein, USDBRL rose the best part of 1%, extending the bounce from Friday’s lows of 4.9315 to around 5.0450 at the close. Brazil’s unemployment rate probably fell in September to 7.7% from 7.8% a month earlier, according to economists surveyed by Bloomberg.

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