Brazil: BCB to remain on hold until disinflation has more time to play out - TDS

Research Team at TDS, expects the BCB to remain on hold until disinflation has more time to play out, and greater certainty over the government’s ability to push fiscal reform through congress is achieved. 

Key Quotes                               

“As such we expect the Selic rate to remain at 14.25% today. For now we think the market remains overly aggressive in the near term with regards to expectations for easing ahead of November, suggesting upwards pressure on short term yields leading into the August and October meetings. Our complete thoughts can be accessed here. We expect easing cycle to begin with a 50bp cut at the November meeting.”