Itaú BBA - Reinforcing receivers in Brazil and Colombia local rates

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Reinforcing receivers in Brazil and Colombia local rates

February 16, 2018

We hold a receiver in the belly of the Brazilian curve in order to profit from the sizable premium still embedded in it.

For the full report, see enclosed file
 

Highligths

  • In an environment of low inflation and milder short-term fiscal restrictions, we saw an opportunity to receive the belly of the Brazilian nominal curve.
  • In Colombia, the most surprising element of the latest monetary policy meeting was the explicit indication the 25-bp cut delivered brought the easing cycle to an end.
  • Following the Colombian Central Bank new guidance, the market nearly erased the expectation of rate cuts previously built in the front end of the IBR swaps curve.

 



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