Direct Treasury: after holidays and Copom, rates on fixed-rate securities advance on this 6th

After the break for the Corpus Christi holiday, Treasury Direct negotiations resumed this Friday (17) and fixed-rate public bond rates advance up to 12 basis points, echoing the last meeting of the Monetary Policy Committee (Copom) of the Central Bank.

This Wednesday (15), the Copom raised the Selic rate by 0.5 percentage point, from 12.75% to 13.25%. With that, the basic interest rate reached its highest level since December 2016 and with an increase for the 11th time in a row.

The decision of the Brazilian monetary institution was in line with market projections, which priced in a high of this magnitude amid the still challenging inflationary environment.

In the opinion of Idean Alves, partner and head of the variable income trading desk at Ação Brasil, the most important thing to note is that the Copom left the door open for new “softer” highs, not ignoring the imminent risks of high inflation.

For him, it is difficult to imagine that the problem of inflation will be solved in the short term and without generating a recession in the coming semesters.

“We have the cost of unemployment, depressed economic activity, galloping inflation, which can lead to a longer period of readjustments, albeit milder”, he reflects.

According to Alves, fixed-rate bonds become interesting in this scenario, as the slope of the future yield curve shows that the market is already pricing in a potential drop in the Selic rate in the short term.

In the analyst’s view, inflation-linked bonds are no less interesting. He explains that, as inflation moves towards the center of the target, the tendency is for today’s good rates to begin to reduce.

“Like fixed rate bonds, inflation-indexed papers show very relevant rates for building wealth”, he concludes.

Check the prices and rates of all public securities available for purchase at the Treasury Direct this Friday morning (17):

Source: Direct Treasure

external radar

The Bank of Japan (BoJ) has decided to leave its ultra-low rates unchanged, confirming that it will not follow other major central banks such as the US Federal Reserve (Fed) and the Bank of England (BoE) in the tightening. of monetary policy.

After a two-day meeting concluded on Friday, the Japanese central bank kept its interest rate on deposits at -0.1% and the target for the yield on the 10-year government bond (JGB) at around 0%. . The BoJ expects short-term and long-term interest rates to remain at current or lower levels.

The Japanese currency, the yen, has been operating near its lowest levels since 1998, amid the divergence of Japanese and US monetary policies.

On Wednesday afternoon (15), the Federal Reserve (the central bank of the United States) raised interest rates by 0.75 percentage point, to a range of 1.5% to 1.75%, as was mostly expected. by the market since May consumer inflation data surprised the market last Friday. This was the first increase of this magnitude – and also the biggest – since 1994.

The vote to increase interest rates had ten votes in favor and only one against. Esther George, chairman of the Kansas City Fed, disagreed with the majority by voting for a half-percentage-point increase.

According to members of the monetary policy committee, wage gains have been robust in recent months and the unemployment rate has remained low. Inflation remains high, reflecting pandemic-related supply and demand imbalances, higher energy prices and broader price pressures, the committee said.

In the euro zone, the annual consumer inflation rate (CPI) reached a new all-time high of 8.1% in May, after accelerating from 7.4% in April, according to final data released on Friday. by the European Union’s statistical agency, Eurostat. The May result confirmed the preliminary reading and came in line with the expectations of analysts polled by The Wall Street Journal.

The record CPI, which continues to be influenced by the effects of the war between Russia and Ukraine, puts pressure on the European Central Bank (ECB) to tighten its monetary policy.

The ECB’s inflation target is 2%. Last week, the ECB set the stage to start raising interest rates from July.

Compared to April, the euro zone CPI rose 0.8% in May, in line with market consensus.

About Yadunandan Singh

Born in 1992, Yadunandan approaches the world of video games thanks to two sacred monsters like Diablo and above all Sonic, strictly in the Sega Saturn version. Ranging between consoles and PCs, he is particularly fond of platform titles and RPGs, not disdaining all other genres and moving in the constant search for the perfect balance between narration and interactivity.

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