RIO DE JANEIRO, BRAZIL - (Bloomberg) Brazil traders have begun to bet the central bank may deliver the most aggressive interest rate hike since 2010 as the sell-off in local assets deepened amid growing concern about the country’s fiscal outlook.
Swap rates, which were already fully pricing in a half-percentage point rate increase at the bank’s March 17th meeting, are now implying chances of an even bolder move, of 75 basis points.
“There’s a chance the scenario will deteriorate so much until the next meeting that a 50 basis point hike would seem dovish,” said Solange . . .
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