August 15, 2014
Filipe Pacheco – Bloomberg, 8/15/2014
Brazil’s swap rates fell after data showed the economy shrank in June by the most in 13 months, adding to speculation policy makers will limit further increases in borrowing costs.
Swap rates on contracts maturing in January 2017, a gauge of expectations for interest rates, dropped six basis points, or 0.06 percentage point, to 11.54 percent at 9:20 a.m. in Sao Paulo, and were down 12 basis points this week. The real climbed 0.2 percent to 2.2622 per dollar, extending the advance this week to 0.9 percent.
Brazil’s seasonally-adjusted economic activity index fell 1.48 percent in June from the previous month, the central bank said in a report posted on its website today, the biggest drop since May 2013. President Dilma Rousseff is struggling to revive Brazil’s faltering economy, which is forecast by analysts to grow at the slowest pace since 2009, two months ahead of presidential elections.
July 16, 2014
Filipe Pacheco – Bloomberg, 7/16/2014
Brazil’s swap rates dropped to an eight-month low as a report showing deflation added to speculation the central bank will signal today that it will limit further increases in borrowing costs.
Swap rates on the contract maturing in January 2017 decreased three basis points, or 0.03 percentage point, to 11.38 percent at 10:02 a.m. in Sao Paulo, the lowest level on a closing basis since Oct. 30. The real was little changed at 2.2179 per U.S. dollar.
The Getulio Vargas Foundation reported today that producer, construction and consumer prices fell 0.56 percent in the month through July 10, more than the 0.50 decrease forecast by economists surveyed by Bloomberg. A slowing economy spurred the central bank to hold its target lending rate at 11 percent on May 28 after nine consecutive increases to curb inflation.
May 5, 2014
Filipe Pacheco – Bloomberg, 5/5/2014
Brazil’s real fell the most among major dollar counterparts after the central bank reduced the volume of foreign-exchange swap contracts that it offered to roll over, signaling eased support for the currency.
The real dropped 0.9 percent to 2.2407 per U.S. dollar at 3:16 p.m. in Sao Paulo, the lowest level on a closing basis since April 25. The currency posted the biggest decline among 16 major currencies tracked by Bloomberg.
The central bank rolled over in an offering all 5,000 of currency swap contracts due June 2 and worth $247.1 million today, compared with 10,000 available in April auctions. To support the currency and limit import price increases, Brazil also sold $198.4 million of foreign-exchange swaps.
April 1, 2014
Filipe Pacheco – Bloomberg, 4/1/2014
Brazil’s swap rates climbed as a report showed inflation unexpectedly accelerated in the nation’s biggest cities, adding to speculation that the central bank will keep raising borrowing costs.
Swap rates on contracts maturing in January 2017 increased eight basis points, or 0.08 percentage point, to 12.55 percent at 9:49 a.m. in Sao Paulo. The real appreciated 0.5 percent to 2.2605 per U.S. dollar.
The Getulio Vargas Foundation reported today that consumer prices in Brazil’s seven biggest cities rose 0.85 percent in the 30 days ended March 31 compared with 0.83 percent in the prior period. The median forecast of economists surveyed by Bloomberg was for a 0.82 percent increase. Swap rates indicated that traders project that policy makers will lift the target lending rate by a quarter-percentage point to 11 percent tomorrow.
March 12, 2014
Filipe Pacheco – Bloomberg Businessweek, 3/12/2014
Brazil’s shorter-term swap rates dropped as a report showed food and beverage prices rose at a slower pace in February, adding to speculation that the central bank will limit further increases in borrowing costs.
Swap rates on contracts maturing in January 2016 fell six basis points, or 0.06 percentage point, to 12.05 percent at 12:08 p.m. in Sao Paulo. The real depreciated 0.1 percent to 2.3665 per U.S. dollar.
The national statistics agency reported today that food and beverage prices climbed 0.56 percent in February after increasing 0.84 percent in the prior month. To curb inflation, policy makers lifted the target lending rate at their meeting last month by 25 basis points to 10.75 percent, half the pace of the previous six decisions.
February 25, 2014
Blake Schmidt & Josue Leonel – Bloomberg, 2/25/2014
Brazil’s swap rates dropped for a fourth straight day on speculation that policy makers convening for a two-day meeting will limit increases in borrowing costs to a quarter-percentage point.
Swap rates on contracts due in January 2019 sank 12 basis points, or 0.12 percentage point, to 12.44 percent at 4:32 p.m. in Sao Paulo, the lowest since Nov. 22. The real depreciated less than 0.1 percent to 2.3431 per U.S. dollar.
Policy makers will raise the target lending rate by 25 basis points tomorrow to 10.75 percent, according to the median estimate of 59 economists surveyed by Bloomberg, after six straight increases of a half-percentage point. Brazil’s construction costs index rose 8 percent in February from a year earlier, the slowest pace since September, the Getulio Vargas Foundation reported.
February 11, 2014
Blake Schmidt – Bloomberg Businessweek, 2/11/2014
Brazil’s swap rates climbed on concern policy makers will have to keep raising borrowing costs to curb inflation as the nation’s drought and heat wave contribute to higher food and energy prices.
Swap rates on contracts maturing in January 2015 rose four basis points, or 0.04 percentage point, to 11.35 percent at 12:46 p.m. in Sao Paulo, erasing earlier declines. The real depreciated 0.1 percent to 2.4120 per dollar as Federal Reserve Chairman Janet Yellen pledged to maintain the policy of scaling back in “measured steps” a U.S. stimulus program that had supported emerging markets.
Brazil’s worst drought and heat wave in decades is threatening to reduce crop yields and drive up prices. Receding levels in reservoirs may force the nation’s utilities to rely on expensive alternatives to hydroelectric power. To curb inflation, policy makers lifted the target lending rate last month by a half-percentage point for a sixth straight meeting, increasing it to 10.50 percent.
January 27, 2014
Blake Schmidt – Bloomberg, 1/27/2014
Brazil’s swap rates climbed after central bank President Alexandre Tombini said policy makers will fight inflation as the real weakens, reviving speculation that the central bank will extend increases in borrowing costs.
Swap rates on contracts maturing in January 2016 rose three basis points, or 0.03 percentage point, to 12.10 percent at 12:44 p.m. in Sao Paulo. The real depreciated 0.5 percent to 2.4092 per U.S. dollar after tumbling 2.3 percent last week as part of a broad decline in emerging-market currencies.
The central bank is combating inflation in the context of a weaker real, Tombini said at a presentation in London today. The currency has dropped 9.2 percent in the past three months on concern fiscal deterioration will lead to a lower credit rating and amid speculation that the tapering of Federal Reserve stimulus will erode demand for Brazil’s assets.
January 14, 2014
Blake Schmidt & Josue Leonel – Bloomberg, 1/14/2014
Brazil’s swap rates climbed on speculation among some traders that policy makers convening for a two-day meeting will lift borrowing costs by a half-percentage point for a sixth straight time to curb inflation.
Swap rates on contracts maturing in January 2017 were up for a second consecutive day, rising seven basis points, or 0.07 percentage point, to 12.32 percent at 11:03 a.m. in Sao Paulo. The real depreciated 0.2 percent to 2.3629 per U.S. dollar after rising yesterday to the strongest level this month.
“The market seems to be migrating toward a bet on a rate hike of 50 basis points,” Daniel Weeks, the chief economist at Garde Asset Management in Sao Paulo, said in a phone interview.
December 17, 2013
Ney Hayashi & Josue Leonel – Bloomberg, 12/17/2013
Brazil’s real climbed for a fourth straight day as the central bank’s plan for more intervention bolstering the currency in 2014 overshadowed concern that the U.S. Federal Reserve will begin curtailing stimulus.
The real appreciated 0.3 percent to 2.3208 per U.S. dollar at 11:17 a.m. in Sao Paulo. Swap rates on contracts maturing in January 2017 dropped one basis point, or 0.01 percentage point, to 11.96 percent.
Brazil’s central bank President Alexandre Tombini said on Dec. 10 that details of the currency program for 2014 will be announced this week. In the U.S., the Federal Reserve may start reducing asset purchases at its two-day policy meeting starting today, according to 34 percent of economists surveyed by Bloomberg on Dec. 6.