Interest rates fell steadily, amid a set of factors that favored the unloading of premiums accumulated during the week, with emphasis on the benign reading of inflation data in Brazil and the United States. On the fiscal side, the decision of the Federal Supreme Court (STF) to suspend the tax exemption on municipal payrolls was well received, which helped to alleviate the curve.
At closing, the Interbank Deposit (DI) contract rate for January 2025 was at 10.200%, from 10.32% yesterday in the adjustment, and the DI for January 2026 fell from 10.61% to 10.43% . The DI for January 2027 had a rate of 10.80%, from 10.95%, and the DI for January 2029, a rate of 11.33%, from 11.44%.
April’s IPCA-15, at 0.21%, was below the median estimate (0.29%), with a composition considered favorable, even though underlying services, to which the Central Bank pays special attention, continue to run close to 5 % accumulated in 12 months, at 4.93% according to BV bank.
Masterclass
The Most Promising Stocks on the Stock Exchange
Download a list of 10 Small Caps stocks that, in experts’ opinion, have appreciation potential in the coming months and years, and watch a free class
The result put bets on a 0.50 percentage point drop in the Selic in the May Copom, as indicated by the forward guidance, back in the game, still being in the minority. At around 4 pm, the curve projected a cut of 29 basis points, representing an 84% chance of a 25-point reduction and a 16% probability of a 50-point drop. For the June Copom, the pricing of -14 points still showed a picture divided between a 25-point cut and maintaining the rate. For the end of the year, the projection was for a terminal rate of 10.25%, compared to 10.50% late yesterday afternoon.
The president of the Central Bank, Roberto Campos Neto, acknowledged today that the April IPCA-15 “came a little better”, but said that it is necessary to see the inflation trend materialize as expectations are far from the center of the target and indicated that what weighs most is underlying inflation.
In the Economic Departments, professionals admit that the IPCA-15 increases the chances of the Copom maintaining the 0.5 point dose in May, but there is still some reluctance, as external, fiscal and service price uncertainties remain high.
Continues after advertising
For Azimut Wealth Management, given the scenario of high interest rates for longer in the USA, the domestic inflation numbers, although favorable in aggregate, maintain doubts about service prices, a combination that suggests the adoption of a cautious stance by the Copom in May. “The decision is still open, but recent communication, mainly from Roberto Campos Neto, president of the BCB, suggests that the chance of a reduction in the pace to 25 basis points has increased,” says Gino Olivares, chief economist.
The reaction to the IPCA, however, was authorized by the reduction in stress in the external environment, after the March PCE index in the USA came in line with expectations in the monthly data, although with the annual reading marginally exceeding forecasts. Added to the worsening of consumer sentiment measured by the University of Michigan in April, bets on interest rates falling in the US in September have once again gained strength, but the market continues to give greater probability to just a 25-point reduction by December. The ten-year T-Note rate dropped and fell back below 4.70%, standing at 4.67% close to 5pm.
The chief economist at Veedha Investimentos, Camila Abdelmalack, recalls that yesterday the market was scared by the acceleration of the PCE index in the first quarter and today data came out that was more updated and in line with expectations. “Just the fact that it didn’t go up ended up falling well in the market and, together with the other data, gave relief to the currencies. This appreciation of the real also gives strength to the closing of the curve”, she states. The dollar closed today down 0.91%, at R$5.1163.
Continues after advertising
The week ends with a reduction in fiscal discomfort, after the president of the Chamber, Arthur Lira (PP-AL), indicated that the chances of the Quinquênio PEC advancing in the House are slim. Additionally, the decision by STF minister Cristiano Zanin, yesterday, to suspend the payroll tax exemption for municipalities and productive sectors until 2027 was considered a victory for the government.
According to Warren Investimentos, the decision corroborates technical arguments put forward by the Attorney General’s Office (AGU) and will benefit public accounts by up to R$20 billion, but will still need to be confirmed by the full STF. The Senate, however, promises to react. The president of the House, Rodrigo Pacheco (PSD-MG), said he will appeal to the Supreme Court against Zanin’s decision.
