BRAZIL: DI Rates Open Slightly Lower, But The Course Is Rapidly Reversed

Trading 11 juil 2018 Donner votre avis

The one-day interbank deposit futures rates (DI rates) in Brazil opened slightly lower Wednesday in an unexpected move to continue the recent return of premiums, but rapidly reversed its course. The increased risk aversion abroad, following a new U.S. move in the trade war against China, the steady rise of the locally traded U.S. dollar and the local news weigh on the forward curve.

Luis Felipe Laudisio, a fixed-income trader at Renascenia Corretora, recalls that the futures interest market has been "completely against the tide" since last Friday.

According to him, the DI rates tried to continue this move as early as the opening of the session, but the announcement of a new list of Chinese products to be tariffed by the United States causes the USD to appreciate, pushing the curve.

For Icatu Vanguarda's multi-market strategist Dan Kawa, the domestic scenario remains "extremely challenging," pressing local businesses.

"With the government weakening, Congress approved some measures of negative fiscal impact, while the economic reform agenda has slipped," he noted.

Near the middle of the session, the January 2019 DI contract rate was at 6.800%, from 6.795% in the previous settlement, while the January 2020 DI rate was at 8.14, from 8.12%. The January 2021 DI contract rate was stable at 9.09%.

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