# Spending cuts contrast with expanded income tax exemption

> Brazil's government announced a spending cut package on Wednesday, but markets reacted negatively to an expanded income tax exemption for earners up to R$5,000 per month. The dollar spiked against the real and future interest rates rose. Lawmakers aim to pass the package by year-end.

- Date: 2024-11-28 · published 2024-11-28T12:00:00.000Z
- Category: macro · region Brazil · magnitude medium
- Page: https://feedsoft.ai/events/27615-spending-cuts-contrast-with-expanded-income-tax-exemption
- Commodities: [Brazilian Real (BRL per USD)](https://feedsoft.ai/c/USDBRL.md), [Soybean Meal](https://feedsoft.ai/c/SBM.md), [Corn](https://feedsoft.ai/c/CORN.md)

## Why it matters

Persistent fiscal worries keep the real weak, supporting Brazilian export competitiveness in soybeans, meal and corn and pressuring global feed prices.

## Read by commodity

- SBM: bearish ▼
- CORN: bearish ▼
- USDBRL: bullish ▲

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDBRL | 2019-08-01 | [Brazil's Larger-Than-Expected Rate Cut Is a Sign of More to Come](https://feedsoft.ai/events/10779-brazil-s-larger-than-expected-rate-cut-is-a-sign-of-more-to-come.md) | +6.1% | +10.6% |
| USDBRL | 2020-01-23 | [With a Big Crop Expected, Brazil's Soybean Harvest Is Slow](https://feedsoft.ai/events/54912-with-a-big-crop-expected-brazil-s-soybean-harvest-is-slow.md) | +0.7% | +4.8% |
| USDBRL | 2020-03-19 | [Emerging Markets Are in the Fastest Collapse in a Generation - Bloomberg](https://feedsoft.ai/events/11018-emerging-markets-are-in-the-fastest-collapse-in-a-generation-bloomberg.md) | -1.1% | +2.8% |
| USDBRL | 2023-10-09 | [Latam FX Talking: Carry trade unwind recommends caution \| ING THINK](https://feedsoft.ai/events/33831-latam-fx-talking-carry-trade-unwind-recommends-caution-ing-think.md) | -1.9% | -5.1% |
| USDBRL | 2024-06-25 | [Lula’s spending plans turn heat on Brazilian markets](https://feedsoft.ai/events/29989-lula-s-spending-plans-turn-heat-on-brazilian-markets.md) | +3.4% | +3.1% |
| SBM | 2024-06-25 | [Lula’s spending plans turn heat on Brazilian markets](https://feedsoft.ai/events/29989-lula-s-spending-plans-turn-heat-on-brazilian-markets.md) | -1.8% | -7.4% |
| SBM | 2022-04-26 | [PBOC seeks to calm markets with reserve ratio cut - Asia Times](https://feedsoft.ai/events/42068-pboc-seeks-to-calm-markets-with-reserve-ratio-cut-asia-times.md) | -2.5% | -6.5% |
| SBM | 2024-12-18 | [Brazil's real hits record low as markets eye govt spending \| Reuters](https://feedsoft.ai/events/27143-brazil-s-real-hits-record-low-as-markets-eye-govt-spending-reuters.md) | +1.6% | +2.5% |

## Sources

- valorinternational.globo.com: https://valorinternational.globo.com/economy/news/2024/11/28/spending-cuts-contrast-with-expanded-income-tax-exemption.ghtml

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.