Brazil Rally Deepens as Inflation Undershoots and Copom Affirms Prolonged 15% Selic

Overview

• IBGE reported October inflation at 0.09%, the weakest October since 1998, pulling 12‑month IPCA to 4.68% with relief from cheaper electricity and falling at‑home food prices.
• Copom minutes said the current 15% Selic is sufficient if maintained for a prolonged period, noting fiscal and services‑inflation risks and a preliminary, uncertain estimate of the new income‑tax exemption’s impact.
• The Ibovespa rose for a 15th straight session to a record close of 157,749 points after trading as high as roughly 158,467, with banks and Petrobras among the leaders.
• The dollar fell for a fifth day to about R$5.27, its lowest level since June 2024, as the real strengthened alongside improved domestic inflation dynamics.
• Long‑term DI rates declined across the curve as investors priced greater odds of earlier easing, helped by U.S. risk sentiment after the Senate passed a temporary funding plan now awaiting a House vote.