Brazil CPI Doesn’t Change Selic Call; Activity Is Decisive:Garde
Source: BFW (Bloomberg First Word)
People
Daniel Weeks (Garde Asset Mgmt)
To de-activate this alert, click here
UUID: 7947283
(Bloomberg) -- (Machine translation provided by Google and reviewed by Bloomberg editors.)
Alert: HALISTER1- Market projection for the IPCA in 2017 should be revised down after a lower-than-expected result in January and could fall below the 4.5% target if the index continues to surprise positively in February. Activity, however, will be decisive for Selic, says Daniel Weeks, chief economist at Garde Asset Management, in a telephone interview.
- “More than the full IPCA index, which was very low by January standards, the composition of the data was also very benign. The prices of services and the core gauges decelerated”
- “The scenario is very positive for inflation. The stronger real and a possible fall in the price of gasoline can also help”
- “The Central Bank could cut the Selic rate to 9% by the end of the year. And the bias for the rate is down ”
- BCB should make two more cuts of 75bps; If inflation drops further, BCB can extend the 75bps cycle; BCB will only change cut to 100bps if the activity in the beginning of 2017 continues frustrating, as it did in the 2H16
- Political news is also positive, with government showing strength after recess
- “Definition of the calendar indicates that the government is confident in approving the reforms quickly”
- NOTE: IPCA rises 0.38% in January; Est. 0.42%
Source: BFW (Bloomberg First Word)
People
Daniel Weeks (Garde Asset Mgmt)
To de-activate this alert, click here
UUID: 7947283