Overview

• Opposition from União Brasil, PP and PSD coalesced against the measure, leaving approval by both chambers before expiry viewed as unlikely.
• DI contracts retraced, with Jan‑2027 touching 14.085% intraday from 14.132% and closing lower alongside Jan‑2028 at 13.475%, Jan‑2029 at 13.415% and Jan‑2031 at 13.64%.
• Secondary sovereign trading echoed the move as LTN premiums eased, LFTs faced selling pressure despite a 15% Selic and NTN‑B real yields edged down, such as the Aug‑2028 at about 7.33%.
• Finance Minister Fernando Haddad had flagged the MP as a roughly R$17 billion revenue source for 2026, while economists warned the proposal’s flat 18% IR for Treasury securities and preserved exemptions for incentivized instruments could distort demand.
• Local sentiment early in the day was tempered by softer U.S. Treasury yields and a Genial/Quaest poll showing a modest uptick in President Lula’s approval.