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USDBRL Resumes Uptrend, Swap Rates Led by US Curve Developments

BRAZIL
  • On Monday, USDBRL open higher amid broad risk-off sentiment and the persistent gains in the US 10y yield. This resumes the trend of higher highs for the pair and keeps the outlook bullish. Next levels of note include 5.1277, the May 31 high.
  • Reflecting the gyrations in US bond markets, the local swaps curve traded higher by as much as 25bps, with the front end of the curve seeing the most sizeable reaction.
  • The long-end of the yield curve could come into focus Tuesday, with the US curve bear steepening and putting the 30y yield at the highest since 2007.

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