BRAZIL · BOND MARKET
Key Facts
- What is happening Brazil’s National Treasury, the finance ministry’s debt agency, bought back about 16.8 billion reais (about US$3.1 billion) of its own inflation-linked bonds on Tuesday, 27 October. It was the third buyback in two days.
- Why it matters The purchases aim to ease upward pressure on interest rates that jumped after President Lula’s re-election on Sunday, 25 October. Rates remain well above their level before the first round of voting.
- The numbers Buybacks since Monday total about 31.6 billion reais (about US$5.9 billion). Futures rates, the market’s bet on future interest rates, rose more than 2.5 percentage points on Monday and fell 0.34 to 0.41 points on two benchmark contracts on Tuesday.
- Who is who Dario Durigan is Brazil’s finance minister and oversees the Treasury. The central bank’s rate committee, the Copom, sets the Selic, Brazil’s policy interest rate, now 13.75%.
- What to watch Wednesday’s decision by the Federal Reserve, the US central bank, any further Treasury buybacks, and the Copom’s rate decision on Wednesday, 4 November.
- Prediction markets Polymarket, a crypto-based betting exchange, gives a 68% chance that the Selic is held on 4 November and 26.5% for a quarter-point cut (28 October, 3:30 a.m. ET).
- Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
- What it means for you US holders of Brazilian bonds, or of EWZ, a US-listed fund that tracks Brazilian shares, face higher yields and a weaker real. US$1 buys about 6% more reais than on Friday.
Brazil spent about US$3.1 billion on Tuesday buying back its own bonds. The aim is to hold down interest rates after Lula’s re-election.
Brazil bought back about 16.8 billion reais (about US$3.1 billion) of its own inflation-linked bonds on Tuesday, 27 October. The National Treasury, the finance ministry’s debt agency, has spent about 31.6 billion reais (about US$5.9 billion) on buybacks since Monday.
The Treasury buys bonds that investors are selling, so their prices rise and their yields fall. A yield is the interest rate an investor earns on a bond.
What the Treasury Did on Tuesday
The Treasury offered to buy up to 4 million NTN-Bs, its inflation-linked bonds, up from a 3 million cap on Monday. It bought 3.815 million of them, worth about 16.8 billion reais (about US$3.1 billion), from maturities offered between 2030 and 2045.
An NTN-B pays a return above Brazilian inflation, so investors use it to protect savings. Its price falls when investors expect higher interest rates.
The Treasury also cancelled its regular sale of LFTs, bonds that pay the Selic rate, on Tuesday. It had already cancelled its other regular sales.
On Monday, 26 October, it made two buybacks worth about 14.8 billion reais (about US$2.8 billion). One bought fixed-rate bonds in the morning, the other inflation-linked bonds in the afternoon.
The morning round cost about 7.1 billion reais (about US$1.3 billion) and the afternoon round about 7.7 billion reais (about US$1.4 billion). The Treasury’s results for Monday put the yield on fixed-rate bonds due 2037 at 15.37%.
A US 10-year Treasury note yielded about 5% on Tuesday afternoon, roughly a third of that Brazilian yield. A higher yield means Brazil pays investors far more to borrow.
Why Brazil’s Interest Rates Jumped
Brazil’s interest-rate futures rose more than 2.5 percentage points on Monday, 26 October, after Lula’s re-election. These DI futures, traded on B3, Brazil’s main exchange, show the interest rate investors expect over time.
On Tuesday the January 2028 contract fell 0.41 points to 14.41%, from 14.822%. The January 2031 contract fell 0.34 points to 14.935%, from 15.277%.
Lula won re-election to a fourth term on Sunday, 25 October. Finance Minister Dario Durigan said Monday’s pressure was investors switching positions, because the market had been betting on another candidate.
The drop was not a full reversal, and rates stayed well above their level before the first round. Earlier reports cover the Treasury’s first buyback on Monday and the jump in Brazil’s country risk.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
-0.51%
175,710.05
-0.51%
69,711.87
+0.35%
10,766.85
+1.81%
2,848,945
—
2,506.51
+0.06%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 175,710.05 | -0.51% | +19.56% | 176,608.23 | 178,526 | 175,157 | — |
| USD/BRL | 5.34 | -1.32% | -0.84% | 5.42 | 5.42 | 5.30 | — |
| SELIC | 13.75% | — | — | — | — | — | |
| PETR4 | 53.31 | -1.06% | +77.70% | 53.88 | 53.70 | 52.83 | 43,239,500 |
| VALE3 | 62.88 | -2.33% | +1.98% | 64.38 | 64.43 | 62.80 | 24,652,300 |
| ITUB4 | 41.42 | -0.67% | +11.30% | 41.70 | 42.60 | 41.15 | 28,160,700 |
| BBDC4 | 15.69 | -1.63% | -13.88% | 15.95 | 16.30 | 15.67 | 65,766,400 |
| BBAS3 | 17.59 | +0.69% | -15.59% | 17.47 | 18.31 | 17.51 | 67,844,600 |
| B3SA3 | 15.27 | +1.33% | +21.71% | 15.07 | 15.78 | 15.20 | 75,282,000 |
| ABEV3 | 15.40 | +0.20% | +26.75% | 15.37 | 15.68 | 15.31 | 27,307,400 |
| WEGE3 | 45.78 | +2.81% | +10.06% | 44.53 | 47.08 | 45.06 | 9,823,200 |
| PRIO3 | 69.21 | -2.71% | +87.14% | 71.14 | 70.98 | 69.15 | 6,663,200 |
| SUZB3 | 47.14 | -0.55% | -3.79% | 47.40 | 47.84 | 46.10 | 7,151,800 |
| RENT3 | 31.14 | -1.67% | -20.73% | 31.67 | 32.68 | 31.02 | 19,092,400 |
| AZZA3 | 16.72 | +1.15% | -42.24% | 16.53 | 17.42 | 16.72 | 4,875,400 |
| CSNA3 | 4.76 | -4.99% | -47.09% | 5.01 | 5.14 | 4.76 | 14,327,900 |
| GGBR4 | 24.87 | -2.28% | +36.28% | 25.45 | 26.20 | 24.79 | 7,507,900 |
| ENEV3 | 26.79 | +0.45% | +49.78% | 26.67 | 27.35 | 26.30 | 12,263,000 |
What Rates Say About the Selic
The Selic stands at 13.75% after a quarter-point cut on Wednesday, 16 September, the central bank’s data show. The Copom meets on Tuesday, 3 November, and Wednesday, 4 November.
A 2028 futures rate of 14.41% is above today’s 13.75% Selic. That suggests traders expect rates to rise or want extra pay for risk.
Forecasters in the central bank’s weekly Focus survey of 23 October expected the Selic at 13.25% at end-2026 and 11.75% at end-2027. That survey closed before the vote, so forecasters may now revise.
The Copom decides the Selic on 4 November. See the November rate decision preview for the bets and the earlier forecasts.
What It Means for US Readers
US investors in Brazilian bonds, or in EWZ, a US-listed fund that tracks Brazilian shares, face swings in yields and the currency. The central bank’s daily dollar rate, the PTAX, put US$1 at 5.3346 reais on Tuesday.
On Friday US$1 bought 5.0377 reais, and on Monday 5.5007, a jump of 9.2% in one trading day. Tuesday’s rate is still about 6% above Friday’s, which makes Brazil cheaper for American travelers.
The Treasury’s moves sit beside the fiscal target plan that Durigan outlined on Tuesday and the real’s partial recovery. For the wider picture, see the Brazil country page.
What Prediction Markets Say
On Polymarket, bettors gave no change 68% and a quarter-point cut 26.5% for 4 November (28 October, 3:30 a.m. ET). A quarter-point rise got 2.8%, a rise of 0.50 points or more 1.5% and a cut that size 1.2%.
About US$111,300 has traded across the five outcomes, and prices are midpoints of the bid and ask. These are bets, not polls, and they do not decide the Copom’s vote.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What Is Not Known
The yield the Treasury paid on Tuesday is not confirmed, because only one report gives it. The reports reviewed also do not say whether the Treasury will keep buying.
The Treasury’s own notice for Tuesday could not be opened, so the volumes rest on two separate Brazilian reports of 27 October. Both agree on about 3.8 million bonds and 16.8 billion reais (about US$3.1 billion).
Dollar values use 5.35 reais per US$1, the rate of 28 October, for every day. At each day’s PTAX rate, the two-day total would be about US$5.8 billion.
A futures rate averages over time and a survey figure is a year-end level, so the gap is only a guide. Whether investors price a rate rise or only extra risk is not established.
What Comes Next
The Federal Reserve announces its rate decision later on Wednesday, 28 October, and markets are waiting for it. The Copom decides the Selic on Wednesday, 4 November.
More buybacks are possible but none is announced in the reports reviewed. A buyback slows a rise in market rates, but only the Copom changes the Selic.
Frequently Asked Questions
What is a government bond buyback?
A buyback is when a government buys its own bonds from investors before they mature. It pushes bond prices up and yields down.
Why did Brazil’s Treasury buy back bonds this week?
Interest rates rose sharply after Lula’s re-election on 25 October, and the Treasury is trying to limit that rise. Finance Minister Dario Durigan said investors were switching positions after betting on another candidate.
How much has Brazil spent on buybacks?
About 31.6 billion reais (about US$5.9 billion) in two days, including about 16.8 billion reais (about US$3.1 billion) on Tuesday. Monday’s purchases were about 14.8 billion reais (about US$2.8 billion).
What is the Selic?
The Selic is the central bank’s policy interest rate, now 13.75% after a quarter-point cut on 16 September. The Copom committee sets it at eight meetings a year.
How does this affect US investors?
US holders of Brazilian bonds or the EWZ fund face swings in yields and in the real. US$1 bought 5.3346 reais on Tuesday, against 5.0377 reais on Friday.
When is the next Brazilian rate decision?
The Copom meets on Tuesday, 3 November, and Wednesday, 4 November, with the decision at the end of the second day. Bettors on Polymarket give no change 68%.
Sources: Banco Central do Brasil, PTAX dollar rate series; Banco Central do Brasil, Selic target series; Banco Central do Brasil, Focus survey data of 23 October; Tesouro Nacional (National Treasury); Brazilian business press, 27 October: DI futures fall after Monday’s jump; Brazilian business press, 27 October: futures rates and the 16.8 billion reais buyback; Brazilian business press, 27 October: third intervention in two days; Brazilian business press, 27 October: Monday’s buybacks and Treasury rates; B3, Copom 2026 meeting calendar; Exchange rates, open.er-api.com, 28 October (all accessed 28 October 2026).
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief
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