December 1, 2023
Direct Treasury: Interest on government bonds works in a mixed fashion;  Prefix Offers Up To 10.7% Annually With Focus Reviews

Direct Treasury: Interest on government bonds works in a mixed fashion; Inflation papers return to a level of at least 5% per year

Falling Stocks and Index Chart


The general bond market operates with no specific direction on Wednesday afternoon (22), reversing the decline seen in the early morning. Pre-fixed papers show an increase in prices, while inflation papers are trading near stable or slightly declining.

After a series of deadlocks, investors reverse the approval of the 2022 budget by Congress, which allocated R$4.9 billion for election campaigns next year and R$1.7 billion for salary adjustments for the federal police – Bolsonaro’s electoral base for President Jair (PL).

The market is already somewhat anticipating the release of the Expanded National Consumer Price Index 15 (IPCA-15) for December, which will be presented tomorrow (23).

The forecast, according to Bradesco, is for the index to rise 0.8% this month. Itai, in turn, expects a monthly increase of 0.82%. In the previous month, the IPCA-15 was up 1.17% compared to October, according to the Brazilian Institute of Geography and Statistics (IBGE).

On the external scene, the focus remains on the rapid spread of the omicron variant around the world and on gross domestic product (GDP) data for the United States and the United Kingdom.

In this context, and within Direct Treasury, the interest offered by Prefixed Treasury 2024, for example, increased from 10.64%, in the previous session, to 10.67% annually, in the 3:20 pm update. Earlier today, the yield paid was 10.61%.

Similarly, the fixed-rate treasury with semi-annual interest and maturity in 2031 provided interest at 10.58%, compared to 10.53% in the previous session and 10.52% at the beginning of trading today.

Among the inflation-correlated securities, at 3:20 pm, the real treasury IPCA bonus due in 2026 was 5.00% per annum, down from the 5.02% seen yesterday (21) and higher by 4.98% annually, recorded at the opening of trading today. As a result, this bond returned to the minimum interest rate of 5% per annum.

At the same time, the Treasury IPCA + 2055 semi-annual interest offered a real return of 5.28%, the same amount seen the day before.

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Check the rates and prices of all government bonds available for purchase at Tesouro Direto presented on Wednesday afternoon (22):

direct treasury rates
Source: Tesouro Direto

2022 budget and BC . data

On the political agenda, the market reflects approval Federation budget for 2022 by Congress yesterday (21). Now, PLN 19/2021 goes to presidential approval with amendments approved by federal representatives and senators.

According to the approved text, the minimum wage expected to come into force as of January 1, 2022 will be R$1,210. Auxílio Brasil, which replaces Bolsa Família, will receive R$89 billion. The electoral fund will distribute 4.9 billion Brazilian riyals. The Rapporteur’s controversial adjustments, the money used as a currency for political exchange and controlled by Congress, were kept at R$16.5 billion.

The budget also predicts that the health district will have more than R$147 billion and education, and over R$113 billion to spend in 2022. The approved text also gives R$1.7 billion to readjust the Federal Police (Roads and Criminal Code, inclusive).

Representatives approved the order by 358 votes to 97. Senators, by 51 votes to 20.

On the economic calendar, the most prominent are the figures released today by the central bank in Ongoing Transactions. According to the Monetary Authority, Brazil’s current account deficit was $6.522 billion in November, with the 12-month deficit now at 1.92% of GDP.

The result was worse than the $6,300 billion deficit that analysts had expected, according to a survey conducted by Reuters.

In turn, direct investment in the country (IDP) amounted to 4.588 billion US dollars, against expectations of 3.8 billion US dollars.

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The central bank also reported today that the country’s total exchange flow was negative at $6.261 billion in December through 17.

On the other hand, the National Treasury announced on Wednesday that Brazil’s federal public debt rose by 2.34% in November compared to October, reaching R$5.499 trillion.

international scene

Meanwhile, on external radar, the Omicron variant remains in the focus of financial agents. Concern is focused on the potential effects that new trading restrictions may have on economic activity amid a move to accelerate the withdrawal of stimulus and monetary tightening in many economies.

In the US, the Federal Bureau of Economic Analysis (BEA) reported today that US gross domestic product grew at an annual rate of 2.3% in the third quarter of this year, according to the latest review of the data.

Economists consult poetry The Wall Street Journal Expect a 2.1% rise. In the second quarter of this year, the US economy grew by 6.7%, at an annual rate.

Also in the United States, optimism rose after President Joe Biden said there was still a chance of reaching an agreement with Senator Joe Manchin on his economic plan, titled Rebuild better, in Congress, albeit less than the $2 trillion currently projected.

On the other side of the world, this Wednesday, the National Statistics Office (ONS) reported that UK GDP It grew 1.1% in the third quarter compared to the previous quarter. That was the final reading of the data.

Analysts heard The Wall Street Journal They expected a slightly larger advance, 1.3%, the same as the initial reading.

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In an annual comparison, the country’s gross domestic product rose 6.8% in the third quarter, confirming the first reading of the data and exceeding analysts’ expectations who had expected a 6.6% increase.

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