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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.
BRAZIL
- The Brazilian Real has extended Friday's late rally with USDBRL edging further away from noted resistance at 5.7558, the Apr 13 high.
- While technical developments are aiding the move lower, Wednesday's central bank decision will also be playing a big part, both in the expectation of more aggressive tightening of up to 150 basis points and also potential profit taking ahead of the event.
- Recent pressure on front-end swap rates, however, has resumed today most likely in response to the large adjustments to 2021 and 2022 year-end inflation forecasts within the BCB survey.
- As such the DI curve has bear flattened with the front-end reducing a substantial amount of Friday's late relief rally. The chart below indicates how DI contracts expiring in one-year have risen close to 200 basis points since the beginning of last week.
- Brazil DI Swaps:
- Jan '23 +37 bps at 11.21%
- Jan '26 +13 bps at 11.77%
- Jan '31 +5 bps at 12.10
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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