Halister News

(Bloomberg) -- Market expects Brazil inflation as measured by IPCA to show another deceleration in September, the second monthly slowdown in a row. Analysts are looking for signals that food prices might reduce their historical fall and enter a rising cycle that could influence Selic rate’s path.

• Median estimate in Bloomberg survey points out to 0.09% m/m increase in Sept. IPCA
• Itau reduced its projection for 2018 CPI from 4% to 3.8% because of food and services prices, and said that BCB has room to reduce its estimatives as well, which could lead to a 6.5% Selic rate, according to the bank’s chief economist Mario Mesquita’s report
• Camila Abdelmalack, CM Capital economist, has doubts about how long food deflation trajectory will last, but notes that general price indexes known as IGPs continue to show negative agricultural price data
• "Market has already priced in the fall in food prices in the short term, so it probably won’t have much relation to the monetary policy in general" says Matheus Gallina, Quantitas Gestião de Recursos fixed income trader
  • He acknowledges, however, that inflation in September and in the next two months could have a small effect on the "fine tuning" between 6.5% and 7% for the final Selic range

Original Story: Prévia: Mercado espera IPCA com alimentos e ciclo do BC em foco --With assistance from Patricia Lara and Vitor Martinez. To contact the translator on this story: Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net To contact the translation editor responsible for this story: Giulia Camillo at gcamillo@bloomberg.net Reporters on the original story: Josue Leonel in Sao Paulo at jleonel@bloomberg.net; Ana Carolina Siedschlag in São Paulo at asiedschlag@bloomberg.net Editors responsible for the original story: Daniela Milanese at dmilanese@bloomberg.net Marisa Castellani