The one-day interbank deposit futures rates (DI rates) in Brazil ended lower, reflecting the relief in risk aversion after remarks by the chairman of the United States Federal Reserve Bank, Jerome Powell, ina a testimony to the American Senate.
Powell’s comments brought relief to risky assets as a whole by dissipating fears that the fastest-growing U.S. economy could make the authority raise interest rates more often there.
“Powell showed that the Fed may even be a bit more parsimonious in raising interest rates and the U.S. dollar fell,” said Coinvalores fixed-income strategist Paulo Nepomuceno.
The analyst at Guide Investimentos, Rafael Passos, agreed and said that “the day became more positive for global risky assets after Powell’s speech,” causing domestic markets to have a rebound.
In addition to the influence of the external scene, Nepomuceno pointed out that the latest data on domestic activity and inflation have been weaker and have contributed to the fall of the DI rates, especially the shortest and the mediumest maturities.
The January 2019 DI contract rate closed at 6.715%, from 6.78% in the previous settlement, while the January 2020 DI rate was at 8.08%, from 8.20%. The January 2021 DI contract rate settled at 9.11, from 9.18%.