you future interest This Monday’s trading session (10) is: global risk appetite face the possibility of ending ~ strike (“shutdown“) from government of US. Investors also adjusted their positions on the eve of the announcement. IPCA October and minutes from the end meeting Monetary Policy Committee (Kopom) central bank.
While related data is expected to cool down, inflation Last month, some in the market understood that the COPOM minutes should clarify whether the University’s forecast of 3.3% for the IPCA for the relevant period already factored in the impact of the policy. income tax reform (go), was approved by the Senate immediately after the end of the Copom session last Wednesday (5).
When the business closes, the interest rate on the interbank deposit agreement (D.I.) The January 2027 maturity is 13.825%, down from the previously adjusted 13.875%. The DI for January 2029 decreased from 13.07% to 12.955%, and the DI for January 2031 decreased from 13.375% to 13.25%.
The business environment was already showing positive developments in the domestic market from the beginning of the day, following negotiations between Democratic and Republican lawmakers to end the period of public sector closure in the United States. In addition, the good mood among local investors was boosted by the news in a column by Lauro Jardim of O Globo newspaper that Sao Paulo Governor Tarcisio de Freitas (Republican) would be excited again about the opportunity to run for president in 2026.
Thus, although domestic interest rates have fallen since the start of trading, the wave of investment (that is, betting on lower interest rates) has become more firmly established in the fixed rate market in the afternoon. Market participants said the move was driven by optimistic expectations for the October IPCA and Copom minutes to be released tomorrow.
On the inflation front, last month’s data is expected to slow significantly, with a 0.14% rise compared to September’s 0.48% rise, according to the median forecast collected by VALOR DATA. However, investors will be looking for new evidence of improving inflation in items that are more closely tied to the composition of the IPCA and are more resistant to monetary tightening cycles, such as basic and labor-intensive services.
Regarding the Copom minutes, great expectations are placed on understanding whether the IPCA’s forecast of 3.3% for the second quarter of 2027 (the relevant period of monetary policy) revealed in last week’s decision statement already takes into account the impact of the expansion of the IR exemption for salaries up to R$ 5,000 and the tax reduction up to R$ 7,350.
The possibility of a reduction in the Selic rate in January remains on the table, given that the university’s forecasts already include the possible inflationary impact of this policy. If not, the “bar” for a rate cut in the first month of 2026 will be even higher, according to market participants.
It’s not customary for British Columbia to include economic measures in its forecasts before legislation is enacted, but one bond manager says that was the case when pension reform was approved in the first round in 2019.
“I think it could have been done now, especially since (the Senate) approved everything on Wednesday. And on Wednesday, during the COPOM meeting, the proposal had already passed the (Committee on Economic Affairs, CAE) committee,” the operator said on condition of anonymity.
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