The Board sees the recent high in inflation as transitory, and believes its policy stance is consistent with the convergence of inflation to its target.
The print was likely influenced by the weaker Colombian peso and protests that affected transportation routes and led to higher inflation.
The result marked the third consecutive monthly decline, leading the indicator to decrease 0.7% on a quarterly basis.
The Board recognizes the recent acceleration in inflation as transitory and see inflation converging toward its target with current rate levels.
According to BCB, the monthly GDP proxy index (IBC-Br) decreased 0.3% mom/sa in March.
Both our monthly GDP proxy (PM-Itaú) and service sector revenues (PMS) declined in March.
The committee indicates that, while 1Q19's GDP may well have a negative print, activity is likely to rebound after the pension reform.
The minutes suggest the Copom is still comfortable with the level of the Selic rate, but we expect the BCB to cut rates again in September.
Our LatAm Macro Monthly report was published today, featuring scenarios for Latam economies, the global scenario and commodities.
Despite some monthly upward pressure in the core services component, core inflation remains in comfortable levels.
Despite some monthly upward pressure in the core services component, core inflation remains in comfortable levels.
The print reinforces our view of weak GDP growth in 1Q19.
We’ll learn more about their thinking with the release of the minutes on Tuesday, May 14 at 08:00 AM.
For the time being, we anticipate seasonally-adjusted declines in both retail sales indicators in April
Uncertainty over the direction of domestic policy and the approval of the USMCA by the U.S. Congress will continue to weigh on investment in the short-term
We’ll learn more about their thinking with the release of the minutes on Tuesday, May 14 at 08:00 AM
We believe that the central bank will remain on hold throughout the year
Gross fixed investment came in above expectations in February.
Activity in the first quarter of 2019 grew at its slowest pace since 2Q17.
We expect the Copom to maintain the Selic rate at 6.50% in its next monetary policy meeting.
March's industrial production will also be released today.
Next week, Copom, inflation and activity data on focus.
The EMAE (official monthly GDP proxy) printed the third consecutive increase in February.
For April’s industrial production, our preliminary forecast points to a 0.9% mom/sa decline.
With these results, the week was marked by weak results in confidence indicators among broadly all sectors.
Despite the improvement, the indicators still reflect a slow-paced recovery of the labor market in the first quarter of the year.
Despite the increase, the level of industrial business confidence remains low, pointing to stagnation of industrial production going forward.
While still timid, the advance is better than the sideway movements registered in other sectors in the same period.
Additional widening in the CAD or tightening of financial conditions could change the mood in the board.
Confidence in the retail and construction sectors moved sideways in April.
The industrial prices component surprised to the upside
The poll surveyed 2000 participants between April 12th and 15th.
The poll surveyed 2000 participants between April 12th and 15th.
The proposal will now head to a Special Committee at the Lower House, yet to be created.
If the proposal is approved, it will then be evaluated by a Special Commission at the Lower House, yet to be created.
At the margin, activity lost momentum, expanding a mild 1.0% qoq/saar, below the 3.1% recorded in 4Q18.
If this trend of confidence indicators moving sideways continues, it will indicate a formal job creation (CAGED) of around 20k in April.
If this trend of confidence indicators moving sideways continues in other sectors, this will indicate a formal job creation (CAGED) of around 20k in April.
April’s IPCA-15 mid-month inflation will be released on Thursday. We expect a 0.69% increase in the period.
While the policy, in our view, will not have a material impact on the CPI, it signals the government’s concern in maintaining support for the October election.
Untamed inflation and the political cycle have led the government to adopt incomes policy.
The political cycle and uncertainty about the outcome of the presidential elections is a obstacle to disinflation.
Additionally, the government presented its budgetary guidelines law (LDO) proposal for 2020 to Congress, in line with our call.
Consumer prices rose 4.7% mom from February, above the 4.05% market consensus forecast.
Our LatAm Macro Monthly report was published on Friday, featuring scenarios for Brazil, LaTam, the global economy and commodities.
On a quarterly basis, the index decreased 0.2%.
Our GDP tracking for 1Q19 continues to point to a 0.1% qoq/sa decline.
We expect Banxico to deliver two 25-bp rate cuts in the last quarter of 2019.
We estimate a 2.6% and 0.4% mom/sa decrease in ABPO and ABCR in the period.
The minutes indicate that most board members are still worried with the inflation outlook.
Notwithstanding the elevated headline result for March, core inflation measures remain on a very comfortable path.
We forecast gains of 0.3% in core retail sales and 0.9% in broad retail sales for March.
Overall, the still-low inflation, looser policy stance by the Fed, and risks to global growth suggest there is no haste to remove stimulus in the near term.
February’s core retail sales remained flat, while the broad index receded in the period.
See our Week Ahead full note at the end of this report.
A moderation in downside inflationary pressures is in line with the view that low inflation is transitory
See our Week Ahead full note at the end of this report.
Indec also reported construction activity indicators for February.
Industrial activity fell by 8.5% yoy in February 2019, marking its tenth consecutive drop.
Bolsonaro will reportedly meet with six or more party leaders throughout the day.
It is important to watch the outcome of these meetings closely, to gauge the lawmaker's positions may evolve throughout the next weeks.
We now forecast a 0.1% mom/sa decrease for March’s industrial production
Chilean central bank is following the global liquidity tide, while also reacting to domestic issues that reflect a slower inflation convergence to the 3% target
Quarterly moving average remained stable in February.
Overall, the Chilean central bank is following the global liquidity tide and reacting to developments that reflect a slower inflation towards the 3% target.
Stable rates for most of this year is the likely base case scenario
The week was marked by a generalized drop in confidence among all sectors, reinforcing our view of weak growth in early 2019.
The national unemployment rate reached 12.4% in February, in line with our call and 0.1 p.p. below the market’s.
BCB released its 1Q19’s quarterly inflation report.
The index accumulates a loss of 8.3 points in the last three months
Confidence fell among consumers of all income classes
Overall seasonally-adjusted delinquency remained virtually stable at 2.9%.
CAGED (formal job creation) registered a net creation of 173k jobs in February
We expect the Selic rate to remain stable at next meetings.
CAGED registered a net creation of 173k jobs in February.
We expect a central bank hike only by the end of the year
We only expect a rate hike by the end of the year
Decelerating activity also led to higher unemployment in 4Q18.
We project a GDP contraction of 1.2% for this year.
The committee now sees the balance of risks to inflation as symmetric
We believe that the committee will keep the Selic rate stable at 6.5% p.a.
Inflation forecasts are anchored, in a context where the level of slack in the economy remains high.
For 2019, we see GDP growth moderating to 3.2%
In year-over-year terms, the indicator came in at 2.1%
For 2019, we see GDP growth moderating to 3.2%
Year-over-year, the index increased 3.6%
Year-over-year, the index increased 1.9%, from 0.6% in the previous month
Year-over-year, the index increased 1.9%, from 0.6% in the previous month
The analysis by the CCJ is the first step towards approving the pension reform, presented by the government to Congress on February 20
Our preliminary forecast for the IPCA in March is 0.51%, with the year-over-year change picking up to 4.33%
Our preliminary estimate for February is a 1.4% increase at the margin
Our preliminary forecast for the IPCA in March is 0.51%, with the year-over-year change picking up to 4.33%.
Despite the strong increase in auto production, demand data remain weak, posting mixed results in February
The inflation rates will likely remain low this year
Despite the strong increase in auto production, demand data remain weak for the month
We revised our yearend forecast for 2019 to 3.6%, due to recent downside surprises
The inflation rates will likely remain low this year
With the result, inflation reached the central bank’s 3% target, further enhancing the case for stable rates for the time being
We revised our yearend forecast for 2019 to 3.6%, due to recent downside surprises.
With the result, inflation reached the central bank’s 3% target, further enhancing the case for stable rates for the time being
Looking ahead, we expect GDP to grow 2.0% in 2019 and 2.7% in 2020, assuming progress in reforms
The decisions go in the right direction, given the deterioration of the inflation outlook and the proximity of the wage bargaining season
We expect GDP to grow 2.0% in 2019 and 2.7% in 2020, assuming reforms advance. Importantly, the earliest indicators for 1Q19 add downside to our call
We expect the unemployment rate to slide to 11.8% by year-end and to 11.5% by the end of 2020
We expect the unemployment rate to slide to 11.8% by year-end and to 11.5% by the end of 2020.
His speech focused on creating a sense of continuity, praising both the work done by the current administration
We expect economic activity to slow to 1.7% this year, with risks tilted to the downside
His speech focused on creating a sense of continuity
We expect economic activity to slow to 1.7% this year, with risks tilted to the downside
Fitch has kept Chile’s rating stable since the one notch downgrade implemented in August 2017
We expect inflation to reach 3.8% for the end of this year.
The education component posted the major positive monthly change
The reform will now be examined by the Constitution and Justice Committee (CCJ) as well as special commissions
In year-over-year terms, the inflation registered a 3.73% change
The reform will now be examined by the Constitution and Justice Committee (CCJ) as well as special commissions
Further details about the proposal and its impact on public finances should be the highlight
A still-incipient activity recovery, risky global scenario and better-behaved inflation suggest there is no need for rate hikes in the near term
Further details about the proposal and its impact on public finances should be the highlight
A still-incipient activity recovery, risky global scenario and better-behaved inflation suggest there is no need for rate hikes in the near term
Relative to the same month in 2017, the index rose 0.2%
We still don’t have all the details on the final proposal, but it is shaping out to be ambitious
Relative to the same month in 2017, the index rose 0.2%
The President approved setting a minimum retirement age of 65 for men and 62 for women, with a transition in 12 years.
We forecast a slight seasonally-adjusted increase in both retail sales indicators in January
The minutes reinforce the case for stable Selic rate at the 6,5% in coming meetings
For the time being, we forecast a slight seasonally-adjusted increase in both retail sales indicators in January.
We expect economic activity to slow to 1.7% this year, with risks tilted to the downside, from a preliminary estimate of 2.0% in 2018
The minutes reinforce the case for stable Selic rate at the 6,5% in coming meetings
We expect economic activity to slow to 1.7% this year
Our preliminary estimate for the IPCA in February is a 0.28% increase that would push the year-over-year rate down slightly to 3.74%
We now expect the central bank to keep the policy rate unchanged throughout this year
We expect the Copom to leave the base rate unchanged until year-end
We now expect the central bank to keep the policy rate unchanged throughout this year
We will learn more about the authorities´ thinking with the release of the Copom minutes on Tuesday, February 12, at 0800 Brasília time.
We expect the activity recovery to consolidate this year, but lingering headwinds would reduce growth between 2019 and 2018
We expect the activity recovery to consolidate this year
Retail sales including vehicles grew 2.4% (-0.8% in November), below the market consensus (3.0%) and our call (3.2%)
Overall, we expect the monthly GDP proxy (Imacec) to grow 3.5% in December (3.1% previously) and 4.0% in 2018 (1.5% in 2017)
Deputy Rodrigo Maia (DEM) was re-elected to the Lower House speakership
Our preliminary forecast for January is a 0.3% rise at the margin
The reading was higher than our estimate and the median of market expectations (both at 11.4%).
We retain our view of a gradual normalization cycle, with risks clearly tilted to fewer hikes
Brazil’s nationwide unemployment rate remained at 11.6% in the quarter ended in December
The daily average of new non-earmarked loans for consumers increased 2.0% mom
We expect economic activity to decelerate to 1.7% this year, from a preliminary estimate of 2.0% in 2018
Confidence within the retail sector remained virtually unchanged (-0.2%) in January, following three months of steady gains
The daily average of new non-earmarked loans for consumers increased 2.0% mom
Confidence within the retail sector remained virtually unchanged (-0.2%) in January, following three months of steady gains
We forecast a GDP decline of 2.2% for the full year of 2018 due to tight macro policies and lower real wages
Our preliminary forecast for the headline IPCA in January is a 0.40% increase, lifting the year-over-year rate to 3.86%
We expect inflation to reach 3.8% for the end of this year
Going forward, we expect the improvement in financial conditions since October to continue supporting the formal labor market
We forecast a net destruction of 314k jobs
President Bolsonaro will make his speech at the World Economic Forum annual meeting
The president said that the government has the credibility required to carry out the reforms that “the country needs and the world expects”
We expect the activity recovery to continue, aided by low inflation and a mildly expansionary monetary policy.
President Bolsonaro will make his speech at the World Economic Forum annual meeting
We expect the activity recovery to continue, aided by low inflation and a mildly expansionary monetary policy
Relative to the same month in 2017, the index rose 1.9%
Relative to the same month in 2017, the index rose 1.9%
Such weakness, is caused by the lagged effect of tighter financial conditions in 3Q18 combined with the slowdown in global growth
Going forward, we expect growth to accelerate, prompted by more expansive financial conditions
In our view, such weakness is caused by the lagged effect of tighter financial conditions in 3Q18 combined with the slowdown in global growth
The weak result reinforces the outlook of a soft industrial production in 4Q18
Going forward, we expect growth to accelerate, prompted by more expansive financial conditions
The weak result reinforces the outlook of a soft industrial production in 4Q18
For January, our preliminary estimate for the IPCA is a 0.42% increase, which would lift the year-over-year rate to 3.9%
For January, our preliminary estimate for the IPCA is a 0.42% increase
It would be the second hike in the gradual normalization cycle following the October initiation
We expect four rate hikes this year (to 3.75%)
We expect annual inflation to end 2019 at 3.8%
Our preliminary forecast for December is a 1.0% increase at the margin
We expect annual inflation to end 2019 at 3.8%
We expect a deceleration to a still-solid 3.5%
Our preliminary forecast for December is a 1.0% increase at the margin
We expect growth of 3.5%, down from the 3.9% seen for 2018
We expect a deceleration to a still-solid 3.5% pace this year
We expect growth of 3.5%, down from the 3.9% seen for 2018
We still expect one additional interest rate hike (bringing the policy rate to 8.5%) in 1Q19
However, the minutes do not suggest that any of the four board members that took part in the decision has the mind set on hiking again
He stated his view that the uncontrollable expansion of government spending is the main problem in Brazil
The new president kept the campaign tone
In the speech, Bolsonaro indicated that he will undertake initiatives to clash crime as a high-level priority
Weak labor market in November, faltering business and consumer confidence and lower oil prices pose risks to the activity recovery
Weak labor market in November, faltering business and consumer confidence and lower oil prices pose risks to the activity recovery
Soft industry confidence in December glooms the meaningful confidence recovery from other sectors
The confidence indicators’ performance in December solidifies the strong gains shown in the previous two months.
The confidence indicators’ performance in December solidifies the strong gains shown in the previous two months.
Amid rising upside risks to inflation, we expect an additional 25-bp in the 1Q19
Our preliminary forecast for the headline IPCA in December is a 0.18% hike, ending the year at 3.78%
We forecast a GDP contraction of 2.2% this year
Amid rising upside risks to inflation, we expect an additional 25-bp in the 1Q19
Projections are still consistent with the convergence of inflation towards its targets in 2019 and 2020
We forecast a GDP contraction of 2.2% this year
The Copom also discussed the recent drop in inflation forecasts and assessed the level of underlying inflation measures
The minutes reinforce the outlook that the Selic rate will hibernate at the current level for quite some time, barring significant shocks
The new government is committing to fiscal responsibility, but the implementation of the fiscal targets is challenging
Components breakdown shows that the headline result was stronger than suggested by diffusion
The new government is committing with fiscal responsibility, but implementation of the fiscal targets is challenging
The statement kept a cautious stance on financial conditions and global economic activity (due to trade war risks)