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Brazil's central bank Copom is expected to cut the Selic rate by 0.25 percentage points at its November meeting, according to Banco Safra chief economist Carlos Kawall. Kawall said he does not expect a larger 0.5-point cut that many analysts had predicted, citing caution after Donald Trump's election win.
He also noted that 10-year US Treasury yields have risen above 2%.
A stronger dollar and higher Brazilian risk premium weaken the real, which raises import costs and inflation expectations for Brazil and can make Brazilian soybean and corn exports more competitive in dollar terms. A smaller rate cut keeps domestic financing tighter, which can weigh on local demand for feed.
bnamericas.comNov 11, 2016After 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.
After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% 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.
