BCB PREVIEW: Brazil Minutes Seen Reinforcing On-Hold Stance
(Bloomberg) -- BCB minutes due tomorrow may maintain relatively hawkish stance, while markets eye prospects of potential government change, according to analysts.
- The minutes are likely to be hawkish, given last week’s statement; nonetheless, this document loses a little of its relevance as the current BCB team may be replaced, Paulo Petrassi, FI trading manager at Leme Investimentos, says
- NOTE: Copom last week kept Selic at 14.25%; meeting statement, despite recognizing some progress, warned that “high level of inflation over 12 months and inflation expectations that are distant from the objectives” don’t offer room for rate cuts
- BCB likely to maintain tone seen in statement, Roberto Padovani, economist at Banco Votorantim says
- Would-be FinMin Meirelles likely to pick a BCB team with strong credibility, showing that the bank no longer will tolerate high inflation
- “Both Temer and Meirelles know that rate cuts in the future will depend on confidence being regained”
- NOTE: VP Temer, if he replaces President Rousseff after an impeachment approval next week, is said to consider Itau’s Goldfajn, Safra’s Kawall, Plural’s Mesquita or former director Bevilaqua as BCB governor
- NOTE: DI Swap rates project possibility of rate cuts starting in July; BCB releases minutes on Thursday, 8:30am local time
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Paulo Petrassi (Leme Investimentos Ltda)
Afonso Bevilaqua (Banco Central do Brasil)
Carlos Kawall Leal Ferreira (Banco J Safra)
Henrique Meirelles (J&F Investimentos SA)
Ilan Goldfajn (Itau Unibanco SA)
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