News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Join @PaulRobinsonFX at 6:00 EST/10:00 GMT for a webinar on becoming a better trader in current markets. Register here: https://t.co/rriVJ9cZOb https://t.co/CeXXIMXViE
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/K8V8ZcxI25
  • Long position of Chinese Estate's (0127 HK) in Evergrande drops from 8.15% to 7.96%
  • $AUDNZD short surely the most consensus trade out there - Diverging CB policy path well embedded - 140bps of NZ tightening priced in by end-22 leaves little room for error - Bar any extreme risk aversion, parity is rare - $AUDNZD bottom after RBNZ hikes in Oct? (13/14 again) https://t.co/q9olmNWRxH
  • 💶 Balance of Trade (JUL) Actual: €20.7B Previous: €18.1B https://www.dailyfx.com/economic-calendar#2021-09-16
  • Heads Up:💶 Balance of Trade (JUL) due at 09:00 GMT (15min) Previous: €18.1B https://www.dailyfx.com/economic-calendar#2021-09-16
  • ECB's Rehn says Long Term Inflation Expectations are below the ECB's target $EUR
  • 🇭🇰 Unemployment Rate (AUG) Actual: 4.7% Previous: 5% https://www.dailyfx.com/economic-calendar#2021-09-16
  • Ever wonder if there are other chart types that can be used for technical analysis? HLOC charts are discussed in the following article as well as their pros and cons. Learn more here: https://t.co/qV3c7a4YR3 https://t.co/ZvhuPd2rxE
  • Heads Up:🇭🇰 Unemployment Rate (AUG) due at 08:30 GMT (15min) Previous: 5% https://www.dailyfx.com/economic-calendar#2021-09-16
BRL, Ibovespa Brace for Copom Meeting Minutes, Pension Vote

BRL, Ibovespa Brace for Copom Meeting Minutes, Pension Vote

Dimitri Zabelin, Analyst

USDBRL FORECAST, COPOM MEETING MINUTES, PENSION REFORM VOTES –TALKING POINTS

  • Brazilian Real and Ibovespa index eyeing Copom meeting minutes
  • Analysts are expecting policymakers to show rate cut inclinations
  • Progress on pension reforms will be key catalyst for a rate decision

See our free guide to learn how to use economic news in your trading strategy!

The Brazilian Real (BRL) and benchmark Ibovespa equity index are eagerly waiting for the release of Copom meeting minutes. Analysts are expecting the nine-committee council to express more dovish inclinations as the pressure to slash rates builds. Previously “symmetric” inflationary risks may now be tilting to the downside and could prompt officials to favor a cut.

Ibovespa Re-Tests, Breaks Through 100,000 Landmark – Will it Last?

Chart Showing Ibovespa

Downward bias may be amplified if progress on passing President Jair Bolsonaro’s pension reforms proves to be more difficult than it is already is. The relatively young government has been contending with cabinet infighting while attempting to pass a landmark piece of legislation through a fragmented Congress. Furthermore, scandals and ongoing investigations in his inner circle is eroding investor confidence.

May’s Foreign Direct Investment report showed a continuation of capital outflow as investors adjusted exposure to better reflect their newly-formulated risk tolerance. This comes despite high-level talks between Chinese and Brazilian officials to promote greater investment and a major trade agreement with the EU. Following the money, it appears investors are feeling more antsy about betting on Bolsonaro’s Brazil.

It is unclear whether Banco do Brasil will be able to reassure investors with another cut given that interest rates are already hovering at a record low of 6.50 percent. Following the release of the monetary policy statement, analysts gathered that the central bank may cut rates after more progress is made on the pension reform. Much like the BoE and Brexit, Banco do Brasil is largely catering their policy to a political outcome.

The market-disrupting bill is currently being debated in the lower house’s special commission and a floor vote likely take place after July 31. The central bank is being careful about how to craft monetary policy due to the “preponderant risk” to inflation these reforms pose. If rates are cut, BRL will likely suffer while the Ibovespa index may rise on the prospect of cheaper credit, though this may reverse if pension reforms stall.

USDBRL Falls as Dovish Rate Cut Expectations from Fed Build and Pressure US Dollar

Chart Showing USDBRL

FX TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES