IPCA-15 rises 0.09% in October. Core measures remain on a benign path
A second gain in monthly GDP in 3Q19
Retail sales remain on an upward trend
IPCA falls -0.04% in September with core inflation measures lower than expected
The seasonally-adjusted annualized quarterly moving average slid to $31.1 billion from $34.7 billion in August.
Recovery in mining/extraction, while manufacturing remains slow.
Fiscal challenges remain.
The underemployment rate reached 24.3%, matching the August 2018 reading.
The document indicates that the Selic rate may remain at a new low of 5.0% for a lengthy period, rising only from 2021 onward.
The deliquency rate increased slightly to 3.1%, seasonally adjusted.
The minutes reinforced the likelihood of a 50-bp cut in October, but limited the indication of even lower interest rates, for now.
IPCA-15 rises 0.09% in September. Core measures remain on a benign path
The current account posted a $4.3 billion deficit in August, which was wider than our forecast (-$3.9 bn) and market estimates (-$4.1 bn).
The statement indicates that another 50-bp “adjustment” of the base rate is likely in the October meeting.
Monthly GDP goes up in early 3Q19
We believe the backdrop for our scenario of a continued easing cycle has not changed significantly since the last policy decision.
Result reinforces moderate expansion trend in consumer spending
The IPCA rises 0.11% in August, as expected
The data continue to suggest a slow pace of recovery in economic activity.
Trade surplus weakens due to the slowdown in global activity
Fiscal challenges remain
Unemployment remains high by historical standards
The uninspiring labor market dynamics amid pessimistic consumer sentiment mean private consumption would moderate ahead.
Construction sector performance was a positive highlight, increasing 1.9%.
Overall delinquency went up slightly by 0.1 p.p. to 3.1%.
Profit and dividend remittances and a weaker trade balance lead to a wider current account deficit in July.
IPCA-15 rises 0.08% in August. Core measures remain on a benign path
Result reinforces perception of weak economic activity
IPCA recedes to 3.22% in July. Core measures at comfortable levels
Consumption remains in a moderate recovery trend.
The minutes indicate another 50bps cut in September and we expect a Selic rate to reach 5.0% by the end of 2019
Stronger imports yield weaker-than-expected trade surplus in July
Weakness in investment-related components
Unemployment remains high by historical standards
The Copom reduced the interest rate by 0.50 pp and signaled an additional adjustment of the same magnitude at the next meeting.
Reforms are essential to fiscal rebalancing
New earmarked loans retreated 0.4%.
We expect the Copom to start a new easing cycle with a 50bps cut on July 31st
Larger-than-anticipated profit and dividend remittances were behind pressured the primary income balance in June
IPCA- 15 July rises 0.09%, below expectations. Core measures on a benign trajectory.
Result is consistent with weak growth in 2Q19
Broad retail sales (which include vehicles and construction material) advanced 0.2% mom/sa in May.
IPCA is virtually unchanged in June. Food, electricity and auto fuels posted a deflation during the month.
Only 8 out of 26 activities show monthly gains
In sum, June figures showed a lower trade balance at the margin, although the year-to-date reading remains high.
The public sector’s net debt widened to 54.7% of GDP.
Notwithstanding the latest decline, unemployment remains high by historical standards.
Central bank´s forecasts indicate new easing cycle in 2019.
Overall delinquency remained virtually unchanged at 2.9%, seasonally adjusted
The minutes reinforce our call that the Copom will resume easing in July, conditional on concrete progress in the reform front.
Deflation in food prices took the spotlight, with price drops for food consumed at home (-0.82%) and away from home (-0.33%).
Over 12 months, the current account deficit remains at a historically low level: 0.7% of GDP.
The statement opens the way for a resumption of monetary easing, provided there is “concrete progress” in the reform agenda.
Conditional on the pension reform approval, we now expect a decline in the Selic benchmark interest rate to 5.0% in 2019 and 2020.
For May, we expect, for the time being, PM-Itaú to remain stable.
Retail sales quarterly growth is slowing down.
IPCA rises 0.13% in May reinforcing a benign inflation scenario
Manufacturing is on a moderate recovery trend year-to-date.
Stronger exports and imports in May. Trade surplus reaches $ 6.4 billion.
Seasonally-adjusted unemployment declined 0.1 p.p. to 11.9%.
April’s result is a seasonally surplus
For 2Q19, our preliminary forecast is a modest GDP growth of 0.1% qoq/sa
Seasonally-adjusted delinquency slid 0.1 p.p. to 2.9%.
Seasonally-adjusted delinquency slid 0.1 p.p. to 2.9%.
Current account posts $62 million deficit in April and disappoints market expectations
IPCA-15 climbs 0.35% in May. Deflation in prices for food consumed at home stood out, while auto fuels put pressured the index
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.
The result reinforces our call for a contraction of GDP in 1Q19.
Headline inflation accelerated on an annual basis pressured by food and fuels; but should begin a downward path from now on
Report reinforces scenario of a slight increase in consumer spending in 1Q19
The post-meeting statement suggests that the authorities are less sanguine on the state of economic recovery
The Selic rate will likely be kept at 6.5% p.a. in May´s Copom meeting
Result reinforces weakening trend in the industrial sector
Trade surplus remains at historically-high figures
Fiscal challenges remain significant
Employment advanced in the quarter
Seasonally-adjusted delinquency remained virtually flat at 3.0%.
IPCA-15 climbs 0.72% in April, while core measures continue to show a benign trajectory
Current account deficit at historically low levels
Domestic demand components receded during the month
The consumer price index IPCA climbed 0.75% in March, food consumed at home is behind the surprise.
Result reinforces assessment of weakness in 1Q19
The Copom decided to keep the Selic rate unchanged at 6.5% pa, as widely expected, and now sees the balance of risks as symmetric.
Copom should keep the Selic rate stable at 6.5% pa and be cautious about the balance of risks to inflation
Mixed data
Normalization after Black Friday effects
The result reinforces the perception of weak economic growth in early 2019
Our preliminary forecast for the headline IPCA in March is a 0.51% increase
January result has favorable seasonality
The trade surplus reached a $ 3.7 surplus in February and the trade surplus remains at a high level.
The reading reinforces the perception of weak growth in late 2018.
Unemployment drops only 0.1 p.p. over 12 months amid weak economic growth
Overall delinquency remained stable at 2.9%
Smaller trade surplus drives current account deficit to $6.5 billion in January
Our preliminary forecast for the headline IPCA in February is a 0.38% increase
The reform will now be examined by the Constitution and Justice Committee (CCJ) as well as special commissions
Losses in 9 out of 13 monthly GDP components
Result below expectations
The minutes reinforce the case for stable Selic rate at the 6.5% in coming meetings, barring any significant shocks.
Our preliminary estimate for the IPCA in February is a 0.28% increase
The Copom decision came in as expected, but the message was more hawkish than we had anticipated.
The data breakdown indicates that the underlying growth is worse than the headline.
January figures point to a slight moderation in the trade balance, but the trade surplus remains at a historically high level
The result suggests that the output gap opened again during that quarter
We believe that the Copom will keep the Selic rate stable at 6.5% p.a. at the February meeting.
Fiscal challenges remain
Overall seasonally-adjusted delinquency was virtually flat at 3.0%
Smaller trade surplus drove current account deficit to 0.8% of GDP in 2018
Our preliminary forecast for the headline IPCA in January is a 0.40% increase
Household spending climbed while investment fell in November
We forecast sales to decline in December, as the temporary boost from Black Friday fades
For January, our preliminary estimate for the IPCA is a 0.42% increase
Our preliminary estimate for December is a hike of 1.2% at the margin
The trade balance posted a strong surplus for a fourth consecutive year.
2018 Primary result should be much better than the target
Real wage bill expanded due to slightly higher employment
Overall seasonally-adjusted delinquency was virtually flat at 3.0%.
Our preliminary forecast for the headline IPCA in December is a 0.18% increase, ending the year at 3.78%
Current account deficit remains at a historically-low level
Central Bank's forecasts are consistent with stable Selic rate at the current level of 6.5% pa throughout 2019
Investment and consumption remained stable during the month
The statement brought important changes, all on the benign side for prospective inflation
Brazil´s Monetary Policy Committee (Copom) meets again next week and we expect it will maintain the Selic rate stable at 6.5% p.a.
Our preliminary estimate for the IPCA in December is a 0.17% increase
Weakness still reflects tighter financial conditions in 3Q18
November figures suggest a stronger trade balance in 4Q18, led by exports of basic items
Short-term fiscal results are improving
The result was distorted by the direct effects of the truckers’ stoppages in 2Q18.
Formal jobs hasn't shown an improvement yet
Overall seasonally-adjusted delinquency decreased 0.1 p.p. to 2.9%.
Despite the weaker than expected reading, the current account deficit receded at the margin.
Our preliminary forecast for the headline IPCA in November is a drop of 0.05%
Consumption declined in September, but investment expanded
Weak result may reflect a normalization after a month benefited by withdrawals from accounts held under PIS/PASEP programs.
Our preliminary estimate for the IPCA in November is a 0.05% move
Forecasts in line with the targeted path suggest rates may be on course to hibernate for quite some time
October figures showed a wider trade surplus at the margin.
Widespread decline in September
The statement brings few but relevant changes, noting that risks have become less asymmetric
No noticeable improvement in formal employment yet
Fiscal result for the year should be better than the target
Overall delinquency remained stable at 3.0%. Average interest rates and spreads declined.
The current account deficit narrowed at the margin in September, but remains stable at 0.8% of GDP over 12 months
We believe that Copom will maintain the Selic rate stable at 6.5% p.a. at the October meeting
Our preliminary forecast for the headline IPCA in October is a 0.55% increase
Gains in 7 out of 13 monthly GDP components
Better-than-expected readings
Our preliminary estimate for the IPCA in October is a 0.53% increase
A lower than expected result
September figures showed some increase in the trade surplus at the margin.
Short-term fiscal results are better than expected
The seasonally-adjusted unemployment rate fell 0.1 p.p. to 12.2% in the quarter ended in August
Copom´s inflation forecasts indicate that the Selic rate can be kept constant in the coming meetings.
The daily average of new loans rose 0.2% mom/sa in real terms for the non-earmarked segment
Faced with a balance of risks that is tilted towards higher inflation, the Copom stands ready to act.
The current account deficit was stable at the margin last month, but wider than in 2017
Our preliminary estimate for the IPCA in September is a 0.46% increase
The Copom delivered the widely expected decision, leaving the base rate unchanged at 6.5% pa
Headline reading is stronger than diffusion indicated
First year-over-year drop in 16 months
We believe that the current situation is still consistent with a stable Selic rate at 6.5% in the next meeting
Our preliminary estimate for the IPCA in September is a 0.40% increase
Stable inflation amid a gradual activity recovery, will justify stable rates for the time being.
Output remains above pre-stoppages levels
August trade surplus figures showed moderation at the margin
Growth negatively affected by the truckers’ stoppages in May
Short-term data improve
Employment advanced 0.3% qoq after consecutive declines in recent months
The daily average of new loans rose 0.5% mom/sa in real terms for the non-earmarked segment.
The current account deficit moderated at the margin in July
Our preliminary forecast for the headline IPCA in August is -0.02%
1.4% growth in June
Auto and construction material recovered, but supermarket and fuel sales recede further
Our preliminary estimate for the IPCA in August is a 0.03% move
Copom minutes signal stable policy rate at 6.50% in its next meeting.
Industrial production soared 13.1% mom/sa
The Copom took the universally expected decision, leaving the base rate unchanged at 6.50% pa, without a bias, in an unanimous vote
Weaker trade balance at the margin, due to higher imports, led by purchases of oil-drilling rigs under the Repetro-Sped regime
Participation rate remains in a downward trend
Fiscal challenges remain
The daily average of new non-earmarked loans climbed 1.6% mom/sa in real terms
The current account deficit showed moderation at the margin in June, given the narrower trade surplus
We believe that the current scenario is consistent with the maintenance of the Selic rate at next week’s meeting
Our preliminary forecast for the headline IPCA in July points to an increase of 0.28%
Truckers’ protest was behind the weak reading
Breakdown shows widespread decline
Our preliminary estimate for the IPCA in July is a 0.35% increase
Coincident indicators signal normalization in June
The trade balance seems to have stabilized on a lower level than in the beginning of the year
Fiscal rebalancing remains challenging
Lower participation rate offsets decline in employment
Brazil´s Central Bank models point to inflation below or close to target in all scenarios for 2018, 2019 and 2020.
Average interest rates and spreads receded
The minutes reinforce the message that forward guidance has been abandoned, for the time being, given the currently uncertain environment.
At the margin, the current account deficit increased somewhat in May
Our preliminary forecast for the headline IPCA in June points to an increase of 1.37%.
The Copom kept the Selic rate at 6.50%, in line with our call and the market’s. We expect the Selic rate to remain at 6.50% until year-end.
Result was boosted by a higher number of working days
We believe that the current scenario, while certainly challenging, will lead the Copom to maintain the Selic rate stable at 6.5% at the June 19 and 20 meeting
Result influenced by fewer holidays in the month.