HALISTER1: Brazil Swaps Pressured by CPI; Politics Again in Focus: Garde

Brazil Swaps Pressured by CPI; Politics Again in Focus: Garde

(Bloomberg) -- DI rates rise after above-estimates mid-Feb. CPI shows central bank continues to struggle to slow inflation, Marcelo Giufrida, partner at Garde Asset Management, says in a phone interview.
  • “BCB has been behind the curve for years”; central bank will need help of govt fiscal policy to stem inflation
    • Govt faces hurdle to approve fiscal measures given political crisis; ’’the fundamentals are pretty bad’’
  • BRL drops tracking global risk-off sentiment and also local political developments; market more cautious following optimism yesterday that arrest mandate for Workers Party publicist could raise odds of a President Rousseff exit, opening room for a more pro-reform government
    • While the fresh political facts may change the scenario, outcome isn’t expected in the short term; and that’s not strong enough to justify such sharp repricing seen yday, Giufrida says
  • NOTE: BZ inflation index IPCA-15 jumps to highest Since 2003
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Marcelo Giufrida (Garde Asset Management Gestao de Recursos Ltda)

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