The rates of short deadlines with shorter deadlines tend to undergo slight low adjustments on Thursday (20), after the monetary policy committee (COPOM) makes it clear that it will apply a less than 100 base points over Selic in May.
The assessment was made by professionals heard by Reuters shortly after the Copom, on Wednesday night (19), raise in 100 base points to Selic, to 14.25% per year, but makes it clear that it intends to promote a “less magnitude” adjustment at the May meeting.
“In its communication, the BC chose to give a magnitude of a lower magnitude than the 100-basis points. This means that it will increase Selic by 75, 50 or 25 base points in May,” said Ian Lima, Inter Asset’s active fixed income manager.
For the manager, the Copom statement brought Hawk elements (rigid), such as the assessment that the risks of high inflation follow larger than low and some inflationary projections above what part of the market expects. At the same time, according to Lima, the statement brought Dove elements (milder), as mentions to the incipient moderation signs of growth and the lag of monetary policy.
“When you add the arguments, the net (net effect) is neutral. So when I look at the three possible scenarios for Selic in May, I see an increase of 50-base points,” Lima said, adding that the market was already, even before the outcome of the well-posted copon in this regard.
This means, in practice, that at the short tip of the term curve rates tend to be stable on Thursday or undergoing light low adjustments, with the 50-base points in May as a horizon.
In the case of the next meeting of June, the Copom did not commit to.
“The pricing of the curve was already well compatible with the Copom scenario. The market already had 50 (base points) for the next meeting, as well as residual increases from Selic between 30 and 50 in the period between June and September. In practice, there are already awards in the curve to encompass what was signaled,” said Banco BMG chief economist, Flavio Serrano.
For him, some low adjustments may be seen on Thursday on the “belly of the curve”-between contracts until January 2027-but the movement tends to be contained, precisely because the market was already positioning itself in the sense of only 50-base Selic’s elevation in May.
On the other hand, the XP Research Fixed Income Head, Camilla Dolle, pointed out that the BC indication for May does not necessarily mean a strong deceleration of Selic’s Altas Cycle.
“So we continue with our projection here, from a new increase in the next meeting, but this time of 75 base points. And we stayed with the 15.50% of Selic Terminal,” he said.
With this, according to her, there may be an opening of rates in the salaries of shorter deadlines, “related to the horizon of monetary policy, and this should relieve the long part of the curve,” he said.
