Brazil: Economy at a glance – Rabobank

In the week ending on December 15, most (of the key) Brazilian assets posted a median performance, relatively in line with peers, according to analysts at Rabobank.

Key Quotes

“The easing global pressures from the USD contrasted with a reduced euphoria locally, as the government officially postponed the parliamentary discussions on the pension reform for 2018.”  

“The BRL closed the week at 3.30/USD (-0.2%), a performance only slightly different from peer-currencies (e.g. we estimate that EM and commodity FX stood nearly flat in average).” 

“Elsewhere, the Copom minutes confirmed that the BCB is heading for a (likely final) 25-bp cut to 6.75% in February, yet they leave door open for a possible change in plan. The authority also kept the signal of caution for subsequent moves, which seems to tell that the end is near.” 

“Weak figures in retail and services for October, contrasting with good numbers from manufacturing, have fed a downward bias to our Q4 GDP forecast (0.4% q-o-q, 1.5% annualized).”    

“In a week packed of local economic events, the highlight is the BCB’s Q4 inflation report. On activity, the main release is October IBC-Br, the BCB’s broad activity index (Mon). Another noteworthy report is December IPCA-15 inflation (Thu). For the latter, we project a gain of 0.36% m-o-m and 3.0% y-o-y.”