BRAZIL: Wells Fargo Trims Selic Rate Forecast, Sees Final 25bp Hike In June
May-21 11:54
- Wells Fargo have adjusted their Selic rate outlook and now forecast one last 25bp hike to 15.0% at the June Copom meeting. Previously, they had expected the Selic rate to peak at 15.25%, with a 50bp move next month.
- They view the balance of risk for June as between a hike or a hold, but ultimately believe that elevated inflation and fiscal concerns are enough to prompt one last hike before policymakers embark on an extended pause.
- Wells Fargo says that attractive carry can anchor the Brazilian real in the near term. However, they remain of the view that the intersection of local politics and fiscal policy can drive the real to all-time lows against the dollar towards BRL 6.50 by the middle of next year.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSY FUTURES: Extending Lows
Apr-21 11:11
- Futures extending lows again, sellers meet limited buy interest, low overall volumes volumes at Jun'25 10Y trades down to 110-30 (-7.5), total volume just over 151k. 10Y yield climbs to 4.3676% (+.0427).
- Initial Technical support below at 110-15/109-08 (Low Apr 15 / 11 and the bear trigger); Continued weakness would refocus attention on 109-08, the Apr 11 low. A break of this level would resume the downtrend.
LOOK AHEAD: Monday Data Calendar: Chicago Fed Goolsbee, Leading Index, Tsy Bills
Apr-21 11:05
- US Data/Speaker Calendar (prior, estimate)
- 21-Apr 0830 Chicago Fed Goolsbee interview on CNBC
- 21-Apr 1000 Leading Index (-0.3%, -0.5%)
- 21-Apr 1130 US Tsy $76B 13W, $68B 26W bill auctions
US TSYS: Curves Twist Steeper, Bonds Under Pressure
Apr-21 10:54
- US markets returning from Easter holiday to Treasury curves twisting steeper, bonds under pressure on lighter volumes as European markets remain closed for Easter Monday.
- Currently, Jun'25 2Y & 5Y contracts trade +1-2, 10Y -3.5 at 111-02, 30Y bond -20 at 113-30. 10Y yield +.0291 at 4.3540%.
- Wires continue to report Pres Trump's wishes to interfere with the independent Federal Reserve by sacking Fed Chairman Powell, not to mention ongoing tariff related headlines.
- Initial technical support for TYM5 below at 110-15/109-08 (Low Apr 15 / 11 and the bear trigger). Resistance at 111-17+ (High Apr 16). Volume in 10s just under 130k.
- Cross asset update: US$ falls to early Jan '24 levels, BBG $ index -9.6 at 1215.08; Gold climbs to new intra-day all-time high of 3397.75; stocks weaker SPX eminis -53.50 at 5259.25.
- Limited data today: Leading index at 1000ET, Chicago Fed President Goolsbee interview on CNBC at 0830ET. Tsy bill auctions at 1130ET: $76B 13W & $68B 26W bills.
