The domestic financial market returns from the Carnival holiday this Ash Wednesday from 1 pm, with the reopening of business in B3. But, an hour before, the news is already busy with the dissemination of the Focus Bulletin, with updated market projections for the Brazilian economy in 2021 and 2022.
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Analysts and investors will pay particular attention to the estimates for inflation and the basic interest rate at the end of this year and the next. Along with the return of negotiation of future interest, both “events” will provide subsidies on the market’s vision and expectations for the basic interest rate, the Selic, today at 2% per year.
The market was building consensus on the rate hike already at the next Copom meeting (the Monetary Policy Committee) on March 16 and 17, because of both the announcement of the last meeting and the minutes of the same. But statements by the president of the Central Bank, Roberto Campos Neto, last Thursday, opened the door to the interpretation that the collegiate body can wait for more information before raising the Selic.
In addition, in the last week there were also the release of the January IPCA, which revealed that consumer inflation rose less than expected. New information about the return of emergency aid and how the government will pay for these expenses is also awaited by investors and members of the Copom.
For the former BC Monetary Policy director Luiz Fernando Figueiredo, the market overestimates the high for Selic, according to Bloomberg. Figueiredo, CEO and founding partner of the management company Mauá Capital, said that the BC has become “data dependent”, which means that it will wait for new data before defining the direction of monetary policy.