The rates of short and mid-deadlines have yielded on Tuesday on the one hand, to new signs that the Central Bank will indeed interrupt Selic’s elevations cycle and, on the other, to the light retreat from treasuries abroad, amid news about the ceasefire between Israel and Iran.
In the late afternoon, the DI (interfiniation deposit rate) rate for January 2026 was 14.945%, compared to 14.962% of the previous session. The rate for January 2027 marked 14.205%, compared to the adjustment of 14.271%, and the rate for January 2029 was 13.335%, compared to 13.392%
Among long contracts, the rate for January 2031 was 13.51%, compared to 13.52%of the previous adjustment, and the contract for January 2033 had a rate of 13.63%, compared to 13.606%.
Earlier this day the BC released the minutes of last week’s monetary policy committee (COPOM) meeting, when Selic’s basic rate was raised at 25 base points to 15% per year.
In the document, the BC stated that the additional increase was due to the resilience of the activity, but considered that much of the effect of monetary tightening has so far to come, reinforcing indication already given in the statement of the Copom decision that the discharge cycle will be interrupted.
“It was emphasized that the cycle ever undertaken was particularly fast and quite firm, reinforcing the understanding that, given the lags inherent to the effects of monetary policy, much of the impacts of the most contraction rate is yet to come. As a result, the committee reported that it anticipates an interruption in the interest raising cycle,” the minutes reported.
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For BMG chief economist Flavio Serrano, Tom da Ata reinforced the idea, already expressed in last week’s statement that the BC will keep Selic 15% in July.
“The minutes itself does not change our vision much, but when you read the document, it seems to indicate that the BC needs something very strong to climb Selic again,” he said, adding that after the municipality interrupts the high cycle, it is expected that the next movement will be cut off.
The reaction to the minutes was the fall of future rates, especially in maturities between January 2027 and January 2029, with investors further reducing bets on a new increase in Selic in July.
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The retreat of rates in Brazil was also favored from mid-morning by the slight low of Treasuries income after the ceasefire between Israel and Iran announced the day before-although on Tuesday the agreement was threatened at different times, with accusations aside.
Near the closure of this Tuesday the term curve priced 98% of probability of maintenance of Selic by 15% at the July meeting of Copom. The day before the percentage was 97%.
At 4:45 pm Treasury yield of ten years-global reference for investment decisions-fell 3 base points, 4.291%.
