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Brazilian stocks and the real fell after Bloomberg reported that President Lula's administration was pushing for an early review of the inflation target with the aim of raising it. Markets have priced in higher long-term interest rates as a result, the opposite of the government's goal of cheaper credit.
Currency weakness and higher rates raise the cost of financing for Brazilian agribusiness, while a weaker real could make Brazilian exports more competitive; the effect on feed commodity prices is indirect.
bloomberglinea.comMaria Eloisa Capurro, Martha Beck, Josue LeonelFeb 11, 2023After 301 past bullish macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (57% higher; middle half -1.2% to +1.7%), and +1.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
