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S&P Outlook Upgrade Provides Additional BRL Tailwind

BRAZIL
  • Late Wednesday, credit rating agency S&P Global changed the outlook on Brazil’s BB- rating to positive from stable on Wednesday. This marked the first positive move in the country’s credit rating since 2019, which the agency said comes amid signs of “greater certainty about stable fiscal and monetary policies” that can support Brazil’s growth prospects going forward.
  • USDBRL continued on its downward trajectory yesterday, with the S&P headlines providing an extra boost for the real. USDBRL closed at 4.8110, the lowest close since June 2022. Price action comes amid multiple bullish bets being made on the nation, as highlighted by this piece: {NSN RW910IT0G1KW <GO>}
  • Services sector volume probably rose by 4.5% y/y in April, according to economists surveyed by Bloomberg, after a 6.3% increase in the previous month. National statistics agency IBGE releases report at 1300BST/0800ET.
  • Treasury auctions fixed-rate LTN local notes due 2023, 2025 and 2026; fixed-rate NTN-F local notes due 2029 and 2033.

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