08/17/2023 – 18:06
Future interest rates closed the session on a high. On a day with an empty agenda and news in Brazil, the growing pressure on Treasuries continued to reverberate through assets around the world, putting pressure on local rates, which rose for the fourth consecutive session. In view of the cautious climate, the Treasury reduced the volume of prefixes offered in the auction, but still managed to sell the lots in full.
At closing, the Interbank Deposit (DI) contract rate for January 2024 was 12.440%%, from 12.444% yesterday in the adjustment, and the DI for January 2025 rose from 10.50% to 10.55%. The DI for January 2027 advanced to 10.31%, from 10.23%, and the DI for January 2029, from 10.76% to 10.84%.
Rates even tested some improvement in the morning, oscillating around stability, while the Stock Exchange also operated in the blue, renewing hopes that it would finally have its first session of gains in August. On the curve, the premiums accumulated in the last few days even made room for a correction, but that, just like yesterday, fell by the wayside. The Treasury market worsened throughout the day, dragging stock markets into the negative and putting future rates back on an upward path.
The yield on the 30-year T-Bond reached 5% at the highs of the day, the highest level since April 2011, and that of the 10-year T-Note, a risk-free asset benchmark, reached the highest level since 2007, scoring 4.30% in the late afternoon. In Europe, the 10-year Gilt rate reached a 15-year high.
The chief economist at the TC, Marianna Costa, claims that there is not a preponderant factor to explain the performance of the interest rate market today, but a set. “The external context is what moves, but the fact that the Stock Exchange has been falling for 13 trading sessions also weighs on prices here”, she points out.
According to Costa, investors are preparing for a world with weaker activity and higher interest rates for a good period. “The Fed minutes brought a tougher message and a divided board, but from the data that came out after the meeting it is clear that the Fed is close to stopping raising interest rates, although inflation slows down slowly,” he said. At the same time, the perception about China is that government stimulus to the economy will be lower than expected.
The impact of the global environment on domestic assets was on the agenda of the meeting of economists with BC directors this Thursday, in Rio. According to sources, participants reported concerns about a possible negative impact on the long leg of interest rates and on the exchange rate coming from the Federal Reserve policy, at a time when the cycle of falling interest rates has just begun in Brazil.
Despite the overall cautious scenario, the Treasury managed to allocate allotments of 9.5 million LTN and 2 million NTN-F, which were smaller than the 10 million and 3 million last week. Rates were all below consensus, with the exception of the shortest paper, which was in line, according to Necton Investimentos.
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