Brazil: BCB likely to stay on hold until November - TDS

Sacha Tihanyi, Senior EM Strategist at TD Securities, expect the BCB to remain on hold  until disinflation has more time to play out, and greater certainty over the government’s ability to push fiscal reform through congress is achieved.

Key Quotes                               

“We think the market remains overly aggressive in the near term with regards to expectations for easing ahead of November, suggesting upwards pressure on short term yields leading into the August and October meetings.

We expect the easing cycle to begin with a 50bp rate cut at the November meeting.”