October 7, 2022
Direct Treasury: With the recovery in global markets and a preliminary phenomenon on the radar, government bond prices fall in this third

Direct Treasury: With the recovery in global markets and a preliminary phenomenon on the radar, government bond prices fall in this third

(Ramcarvalho/Getty Images)

São Paulo – Today is witnessing a recovery in global markets this Tuesday (21), after yesterday’s decline. Although the tone is slightly better, investors remain concerned about the crisis in Chinese real estate giant Evergrande and the possibility of contagion to other economies.

Attention is also focused on monetary policy decisions in Brazil and the US, where leaders start meeting on Tuesday (21). On the domestic scene, investors are still following the debate over the labs and President Jair Bolsonaro’s speech at the United Nations General Assembly. In this context, the public bond market operates with lower interest rates when negotiations open.

In the first update of the day, the yield on fixed-yield bonds due in 2026 was 10.25%, compared to 10.43% in the previous session. The interest paid on bonds due in 2031 in turn decreased from 11.06% on Monday afternoon to 10.87% on Tuesday morning.

Among the inflation-linked securities, the real interest rate offered by the IPCA + Treasury due in 2035 and 2045 was 4.67%, down from the 4.76% recorded the day before. The real return for the IPCA Treasury with a maturity of 2055 and the payment of semi-annual interest was 4.81% compared to 4.88% in the previous session.

Check the updated rates and rates for all government bonds available for purchase at Tesouro Direto on Tuesday morning (21):

direct treasury rates
Source: Tesouro Direto

Bolsonaro, court orders and the Israeli occupation forces

One of the highlights on the domestic scene is President Jair Bolsonaro’s (without party) speech at the 76th session of the United Nations General Assembly on Tuesday morning (21). The expectation, according to XP analysts, is for the country’s president to try to balance himself between gestures to his support base and a more moderate tone, advocated by Brazilian diplomacy.

Another topic still under discussion relates to the payment of court orders – the federation’s recognized judicial debt which adds up to a bill of R$89 billion in 2022.

In order to find a solution to the problem, Rodrigo Pacheco (DEM-MG) and Arthur Lira (PP-AL), the presidents of the Senate and the Chamber, respectively, called Paulo Guedes, Minister of Economy, to another meeting This Tuesday (21).

The three are looking for an alternative in which the debt can be paid off without exceeding the spending ceiling while ensuring space in the budget to support the government’s social programme, Auxílio Brasil.

In the political arena, the increase in the financial transaction tax (IOF) announced by the government last week has not been well absorbed by the chamber’s leadership.

The day before, Arthur Lyra (PP-AL) stated that the government’s decision had been taken without discussion with Congress, and that it would later be analyzed by the legislature.

According to the decree published last week, the tax increase will be in effect between September 20 and December 31, and its main objective is to finance the increase in the value of Auxílio Brasil, the government’s new social program that will replace Bolsa Família.

Investors are also watching the deepening water crisis. According to a press article State of Sao Paulo, The Belo Monte plant in Barra, the world’s fourth largest hydroelectric plant, has been operating with half a turbine since August. Currently, it produces about 300 megawatts per day – 2.67% of the total energy.

international scene

Market attention remains focused on the case of Evergrande. In Asia, Hong Kong’s Hang Seng is down more than 3% amid developer weakness approaching hypothetical. But the index recovered and closed 0.51% higher on Tuesday.

Today, according to local newspapers, the president of Evergrande sought to reassure the markets, and stated that the company would fulfill its responsibilities among property buyers, investors, partners and financial institutions.

In the commodities market, Singapore iron ore futures took a breather after the sharp drop on Monday (20). However, it is close to the lowest price since May 2020, while markets in China remain closed for a holiday.

Still on the radar, Tuesday marks the first day of the US central bank’s monetary policy meetings where officials can give more signals about the start of reducing the asset purchase program, currently at $120 billion per month.

Investors are watching too New forecasts from the Organization for Economic Co-operation and Development (OECD) This Tuesday (21). In its latest quarterly Economic Outlook report, the entity slightly lowered its forecast for a global GDP increase in 2021, from 5.8% to 5.7%, but revised upwards its forecast for progress in 2022, from 4.4% to 4.5%. .

On the other hand, the Organization for Economic Co-operation and Development raised its forecast for an increase in Brazil’s GDP in 2021 to 5.2%. In May, the organization forecast that the Brazilian economy will grow by 3.7% this year.

For 2022, the Organization for Economic Cooperation and Development lowered its forecast for Brazil’s GDP progress, from 2.5% to 2.3%, according to the document.

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