BRAZIL: DI Rates Open Lower As USD Rises With Treasure Auction

(RTTNews) - The one-day interbank deposit futures rates (DI rates) in Brazil opened lower as the locally traded U.S. dollar rises and the National Treasure holds an auction. The rates are also influenced by renewed fears of a trade war and by the fiscal situation in Brazil.

Traders said that the new round of bond repurchases announced by the Treasure for three days starting today drives the market to find a "ceiling" for the rate-swing movement. "Still, we have some people trying to measure the impact of the truckers' strike and the government's concessions," a trader said.

For Bradesco's economic team, taking into account such factors, the Brazilian Gross Domestic Product (GDP) growth for the second quarter should be zero (0.0%). According to the bank, the outlook puts downward pressure on the projection of economic growth in Brazil in 2018, currently at 2.5%.

Near the middle of the session, the January 2019 DI contract rate was at 6.770%, from 6.795% yesterday, while the January 2020 DI rate fell to 7.70%, from 7.77%. The January 2021 DI contract rate was at 8.81%, from 8.89%.