Future interest rates rise steadily in Brazil with positive data from US industry

Future interest rates rise steadily in Brazil with positive data from US industry
Future interest rates rise steadily in Brazil with positive data from US industry
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The rate for January 2027 was 10.22%, compared to 10.151%, while the rate for January 2028 was 10.535%, compared to 10.448%. The contract for January 2031 marked 11.01%, compared to 10.906%.

On Friday, with markets in Brazil and the US closed, data showed that the US core PCE inflation index rose 0.3% in February, in line with market expectations. The full index also increased by 0.3%.

The result was as expected, but Powell’s cautious comments on Friday reinforced the view that the Fed could further delay the start of the interest rate cutting cycle. Powell said the institution expects inflation to ease, but if it doesn’t, interest rates will be left where they are for longer. According to Powell, the Fed will let economic data provide the answer on interest rates.

In this scenario, Treasury yields started the day on the rise, which also boosted DI rates (Interbank Deposits) in Brazil. The movement was amplified by the release of positive data on US industry.

The Institute for Supply Management (ISM) said its manufacturing Purchasing Managers’ Index (PMI) rose to 50.3 last month, the first reading above 50 since September 2022, compared with 47 .8 in February. A PMI reading above 50 indicates growth in the industrial sector. The recovery ended 16 consecutive months of contraction in the industrial sector, which accounts for 10.4% of the US economy.

“What further justifies the opening (of the interest rate curve in Brazil) are today’s ISM numbers, above expectations. The data showed an acceleration in North American industry”, said Maurício Ferraz, fixed income manager at Kínitro, remembering that, earlier, China had also released positive data from the industrial sector.

The article is in Portuguese

Tags: Future interest rates rise steadily Brazil positive data industry

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