Optimism About Brazil Fuels Big Rate Cuts Bets, Say Analysts
Source: BFW (Bloomberg First Word)
People
Carlos Vieira (Esc. Lerosa SA Corretores De Valores)
Michel Temer (Federative Republic of Brazil)
Paulo Nepomuceno (Coinvalores CCVM Ltda)
Rogerio Braga (Quantitas Gestao de Recursos SA)
To de-activate this alert, click here
UUID: 7947283
(Bloomberg) -- Brazil swaps market prices in 315bps of rate cuts through end of 2017 in anticipation of President Temer’s success on reforms and BCB crackdown on inflation, analysts say.
Alert: HALISTER1- Market may be ignoring risks such as Temer struggles to implement fiscal adjustment and external backdrop of stagnating flows for EM, Paulo Nepomuceno, FI strategist at Coinvalores, says in a phone interview
- Risk premium loss in the long-end of curve is overdone; “if everything goes right, your gain is few, if something goes wrong, you can lose too much”
- DI rates curve has already anticipated a lot of the expectation of approval of spending cap bill in Lower House, Rogerio Braga, director at Quantitas, says
- Long-end swap rates drop reflects view that president Temer is more able than his predecessor to deal with reforms, Carlos Fernando Vieira, FI head at Lerosa Corretora, says
- Improvement in inflation expectations also helps market to bet on rate cuts
- NOTE: BCB this week forecast CPI below target in 2017 and 2018 when considering Selic rate and USD/BRL at current levels
Source: BFW (Bloomberg First Word)
People
Carlos Vieira (Esc. Lerosa SA Corretores De Valores)
Michel Temer (Federative Republic of Brazil)
Paulo Nepomuceno (Coinvalores CCVM Ltda)
Rogerio Braga (Quantitas Gestao de Recursos SA)
To de-activate this alert, click here
UUID: 7947283