The 50 basis point increase in the Selic base rate, widely expected by the market, and the Central Bank’s statement on the decision tend to be neutral factors for the Brazilian rate curve this Thursday, according to market experts.
The assessment is that, more than the decision of the Monetary Policy Committee (Copom) this Wednesday, which set the Selic at 11.25% per annum, the consequences of Donald Trump’s victory in the American elections, comments President Luiz Inácio Lula da Silva on the fiscal package and the Federal Reserve’s decision on interest rates on Thursday afternoon tend to influence DIs (interbank deposits).
“Basically the message is the same as in the previous meeting, so keep playing. There is no reason to make any changes in terms of scenario. The most likely thing is that (Copom) will raise the Selic by 50 basis points (in December ), but there is the possibility of accelerating if the scenario does not help”, said the chief economist of the BMG bank, Flavio Serrano, after the release of the press release.
“So, we will not see big changes in the shape of the curve this Thursday. There may be short-term adjustments, possibly short-term interest rates may fall, but the dynamics of the peaks will depend more on the rest of the news,” he added.
For Marcelo Bolzan, investment strategist and partner at The Hill Capital, the tone of the Copom statement was neutral, following the same line as the previous document.
“Regarding the opening of markets tomorrow, I believe the announcement will not make a big difference, as it was already widely expected by the market,” he said in a comment sent to clients.
This is also the assessment of Mayara Rodrigues, fixed income analyst at XP.
“The entire fixed income strategy was already placed in this scenario, increasing by half a percentage point,” he said in a comment released after Copom.
“As regards the rate curve, we hope that tomorrow there will not be so much volatility. This increase was already discounted on the shortest segment of the curve, but in the next few days we will need to monitor the spending package that should be released, and then yes it can change the rate curve, especially on longer maturities,” he added.
In an interview with RedeTV, according to an excerpt released on Wednesday evening, President Luiz Inácio Lula da Silva avoided anticipating the fiscal measures that the government will have to adopt, because according to him the package has not yet been finalized.
“I am in a very, very serious discussion process with the government, because I know well the discourse of the market, the speculative greed of the market,” Lula said in the video released before the Copom announcement.
After the BC’s decision, the Minister of Finance, Fernando Haddad, avoided commenting, specifying that he had not had time to read the statement.
Long-term DI rates and the dollar closed sharply lower in Brazil on Wednesday, with the market awaiting the government’s fiscal measures.
Source: Terra
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