BRL May Be Affected If BCB Signals Rate Below 7%: UBS’s Volpon
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
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Tony Volpon (UBS AG)
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UUID: 7947283
(Bloomberg) -- If the Copom indicates that the Selic will fall below 7% level, which is not the most likely scenario, the signaling may have an impact on the exchange rate and the swap rates curve, Tony Volpon, an economist at UBS Brasil and former director of the Central Bank, says in a telephone interview.
- Long end of swaps curve is curve isn’t following BCB closely, as some people don’t believe rates can fall to 7% or 6.75% and stay there for a long time
- With lower carry trade, there has been some outflow, while there’s no inflow to counterbalance that move since political risk is high
- Some investors are concerned with possibility of volatility increase during 2018, as it’s an election year
- BRL is disconnected from fundamentals, which include positive trade terms and economic recovery
- Recent BRL weakness is not due to domestic fundamentals, it was a rather technical move
- NOTE: Access TOPLive to follow coverage of Brazil rate decision and analysts’ comments on Oct. 25 (in Portuguese). To create an alert, click here
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Tony Volpon (UBS AG)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283