Interest futures rates closed very close to steady on Monday, with a slight upward bias, on a day marked by falling Treasury yields abroad after the latest hikes brought relief to business.
Earlier in the day, Treasury yields rose again, with 10-year bond yields – one of the benchmarks for global corporates – once again topping 5%.
Also in the morning, however, yields abroad lost steam, leaving room for a more positive day in Brazil for much of the session.
“The stop movement (on the Brazilian interest rate market) which contributed to alleviating it, together with a decompression abroad, is over,” commented the chief economist of the BMG bank, Flavio Serrano.
DI rates fluctuated slightly lower for much of the session, in line with falling yields, but returned to stability before the close.
In the afternoon, the president of the Central Bank, Roberto Campos Neto, said at an event in Sao Paulo that it is difficult to predict what the amount of federal revenue will be, due to the measures currently being examined by Congress, but that it is important that the government pursues by pursuing the established fiscal target.
“It’s important not to change the fiscal objective, it’s important to pursue the objective… to follow the regulatory framework,” he said.
Nearing the close, the forward curve priced in the possibility of a Selic base rate cut next week to 97% at 0.50 percentage points. The possibility of a cut of just 0.25 percentage points was estimated at 3%. Selic is currently at 12.75% per year.
As of late afternoon, the DI rate for January 2025 was at 11.055%, up from 11.039% in the previous adjustment, while the DI rate for January 2026 was at 10.99%, up from 10.967% in the previous adjustment.
Among longer contracts, the rate for January 2027 was at 11.18%, up from 11.148%, while the rate for January 2028 was at 11.435%, up from 11.409%.
The Focus report published today by the Central Bank did not bring any news and did not price the forward curve. Economists consulted by the BC slightly reduced their inflation and growth outlook for this year, while at the same time making no major changes to their forecasts for 2024.
Overseas, Treasury bond yields continued to fall late in the afternoon.
At 4.58pm (Brasilia time), the yield on 10-year Treasury bonds – the global benchmark for investment decisions – fell 7.20 basis points to 4.8523%.
Source: Terra
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