10/26/2023 – 18:07
Benign data on inflation in Brazil and the fall in Treasury rates after indicators showed a more contained price rise in the United States guided the movement of the Brazilian DI market, with future interest rates retreating along the entire curve, but with more intensity in the medium and long term peaks, where rates fell by more than 20 basis points. The focus on indicators left news with the potential to change the price scenario in the future in the background – such as the announcement of an increase in ICMS on fuels from February 2024.
Data published earlier by the United States government showed that the country’s economy grew 4.9% in the third quarter compared to the previous quarter, on an annualized basis, and that even so, core inflation measured by the consumption expenditure index (PCE ) slowed from 3.7% to 2.4% on the same basis of comparison.
The indicator, released less than a week before the Federal Reserve’s next decision on US interest rates, caused a drop of 10 to 15 basis points across the entire Treasuries curve, with investors trying to get ahead of the US inflation data. PCE for September, which will be published on Friday.
In addition to pressure from abroad, the release of October’s IPCA-15 also weighed on DI rates, which despite having risen more than the market predicted, largely due to a significant increase in the price of airline tickets, indicated a slowdown both core and headline inflation.
“The IPCA-15 showed that there is room for the Central Bank to cut interest rates at a stronger pace. The problem is that it cannot accelerate precisely because in the United States we don’t know if the Fed will need to increase the interest rate”, said Andre Fernandes, head of variable income and partner at A7 Capital.
Rodrigo Correa, strategist at Nomos, highlights that external influence on the Brazilian interest market has been stronger in recent weeks, mainly because of doubts regarding the trajectory of American rates, and that this has already restricted expectations of how far the Selic will go. may fall next year.
Although concerns about abroad prevail, investors are also monitoring domestic news with the potential to change the fiscal and price scenario that this Thursday had little impact on prices, such as Confaz’s decision to raise the ICMS on fuels from February of the year he comes.
Ricardo Jorge, fixed income specialist and partner at Quantzed, considers that although this news is relevant to the economic scenario, investors’ focus is much more focused on events with an impact in the very short term.
Elcio Cardozo, capital market specialist and partner at Matriz Capital, points out that the caution brought by the domestic news may have been timid given the strong downward movement registered this Thursday among DI rates. “If we take the short curve, from 2024, it is negative 0.08. It is not following this very large drop, it is seeing a bigger drop for longer interest rates. Maybe the market understands that all this news has an impact on the short curve, but not on the long curve”, he assessed.
The rate for January 2025 closed at 10.805%, from 10.923% in the previous adjustment, while the rate for January 2027 fell to 10.755%, from 10.997% on the same comparison basis. The rate for January 2029 fell to 11.170%, from 11.438% in Thursday’s adjustment.
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