The one-day interbank deposit futures rates (DI rates) in Brazil opened higher Wednesday, tracking the locally traded U.S. dollar, in the face of greater risk aversion abroad.
Investors also evaluate the decision of the Brazilian Monetary Council (CMN) to set the inflation target for 2021 below 4%, in a day of thinner trading volume due to the Brazilian national team’s match in the World Cup.
Traders said the line auctions scheduled for Monday morning, with two-hour bidding, help ease pressure on the greenback after approaching the R$ 3.80 barrier Tuesday. Abroad, the U.S. currency is quoted at the highest level in a week.
In the futures rates market, investors react to the CMN’s decision to set the inflation target for 2021 at 3.75%, lower than the 4% target for 2020. “The move announced by the CMN to 2021 takes the market to price higher interest rates [ahead] until the reforms evolve,” said Lu?s Felipe Laudisio, a fixed-income trader at Renascenia Corretora.
For CM Capital Markets, the most adverse domestic scenario due to the lack of clarity regarding the next government’s economic policy leaves some doubts about the CMN’s decision. “The goal is feasible, but it should depend on the line of action of the next government,” noted Camila Abdelmalack, a CM’s economist.
Near the middle of the session, the January 2019 DI contract rate was at 6.94%, from 6.925% in the previous session, while the January 2020 DI rate fell to 8.50%, from 8.41%. The January 2021 DI contract rate was at 9.47%, from 9.39%.