Direct Treasury: After a one-hour hold, the fixed interest rate drops to as low as 12.16%; Paper inflation rates are traded on a stability basis

Back on the weekend, negotiations on public securities in the immediate treasury stalled for about an hour throughout the Monday afternoon (18).

In recovery, the interest offered by securities works in a mixed fashion: Inflation-linked bond yields are negotiated steadily, inflation-linked bond yields are negotiated, and fixed-rate bond yields are negotiated.

The suspension occurred due to strong fluctuations in prices and rates. When this happens, the treasury temporarily suspends sales and purchases to prevent the investor from temporarily closing at Transactions at a price can be quickly delayed.

Last week, Treasury Direct also halted trading in the face of strong volatility.

When business returned, at 15:20, the highest return among the fixed-rate was delivered by paper maturity in 2033, which gave 12.16%, versus 12.24% last Thursday (14), where there was no session on Friday (15) because of the holiday.

Among the inflation-linked bonds, the highlight was Treasury IPCA + 2055 with a semi-annual coupon. At 3:20 PM, the actual bonus paid was 5.72%, which is in line with the 5.73% recorded previously.

In the international market, investors are watching rising oil prices and concerns about global inflation. Here in Brazil, the market is interested in the General Price Index-10 (IGP-10) numbers, which increased 2.48% in April, driven mainly by higher fuel prices. It is also worth noting that price hikes are widespread.

In addition, investors are watching the participation of Roberto Campos Neto, President of the Central Bank, in a panel of the International Monetary Fund, this afternoon.

Check prices and rates for all public securities available for purchase at Treasury Direct shown on Monday afternoon (18):

China and commodity data

Data from China is one of the highlights of the session. The National Bureau of Statistics (NBS) reported that China’s gross domestic product rose 4.8% in the first quarter of 2022 compared to the same period last year.

The result exceeded the expectations of the economists he consulted The Wall Street Journalup 4.6% and 4.0% year-on-year recorded in the fourth quarter of 2021. However, it has put China’s economy on a path lower than this year’s official target of 5.5% expansion – even if it materializes, the country’s percentage of activity will lead to Slowest progress in more than 25 years.

On the margins, the Chinese economy recorded an expansion of 1.3% in the first quarter of this year, which is a slowdown compared to the pace observed in the fourth quarter of 2021, when there was growth of 1.6% on this basis.

The data came along with other indicators of the Chinese economy: industrial production, with 5% annual growth in March, as expected; And retail sales fell 3.5% in March compared to the same period last year. The market was betting down 2%.

Also pay attention to the goods. Oil futures rose on Monday afternoon, with news that production at one of Libya’s oil fields had been halted the previous day (17). In addition, as the war drags on, there is fear among financial proxies that further sanctions on the Russian oil trade will further tighten the supply of the commodity.

At around 3:20 PM ET, the Brent contract was trading at $114.33, up 2.35%, and the WTI contract was up 2.11% to $109.21.

IGP-10

On a day with a more empty economic calendar, the highlight are the IGP-10 numbers, which rose 2.48% in April. In the previous month, the index recorded a rise of 1.18%. With this result, the index accumulates up 7.63% in the year and 15.65% in 12 months.

In the document, Andrei Braz, Coordinator of Price Indicators, emphasized that the largest contribution came from fuel, in addition to the significant rise in fertilizer prices. But the researcher said inflationary pressures are widespread.

According to him, even excluding the contribution of gasoline (0.15% to 18.73%) and diesel (0.24% to 24.90%) in the broad PPI, the average product variance for the producer would be 1.81%, exceeding the difference calculated by the IPA in March .

Guedes in the IMF and accounts in the red

In the political arena, attention is focused on the series of meetings of the Group of Twenty finance ministers at the International Monetary Fund.

According to local press reports, Paulo Guedes, Minister of Economy, is heading to the United States to sell the idea that Brazil is a “safe haven” to receive investments.

“Brazil will be there presenting itself as a solution. The Minister clearly said in the last opportunities that Brazil is a safe haven. We have done our homework with the local renovations and this makes us more resilient in the face of the most unfavorable and turbulent environments.” State of Sao Paulo.

Also of note is the Budget Guidelines Bill (LDO), which was sent to Congress last Thursday (14).

At the time, the Ministry of Economy proposed an initial deficit target of R$65.9 billion for 2023. The primary deficit refers to the amount that the government must spend on top of the year’s revenue, not counting public debt expenditures.

To meet this extra amount, the union will have to issue more debt. Once the result is confirmed, this will be the tenth consecutive year for public accounts. The path of fiscal deficits began in 2014.

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