Brazil Stocks Set Record, Real Gains as IPCA‑15 Hits Target Ceiling and Central Bank Signals Cuts

Overview

• IBGE’s IPCA‑15 rose 0.20% in November, taking 12‑month inflation to 4.50%, the top of the target band, with pressures from airfare and services offset by cheaper fuels and some food at home.
• Ibovespa closed up 1.7% at 158,555 points, a nominal record, while the dollar fell 0.77% to R$5.335 as risk appetite strengthened.
• BC monetary policy director Nilton David said the next Selic move should be a cut, shifting debate to a January or March kickoff for easing, as Fed cut odds in December buoy EM assets.
• Brazil’s yield curve flattened: long‑dated DIs fell sharply (Jan/2031 to 13.015%) while the short end held near prior levels after the IPCA‑15 print, with Jan/2027 around 13.51%.
• Caution persists on domestic politics and fiscal risks; the BC’s Comef said Banco Master’s liquidation is not systemic, and external accounts showed a US$5.1 billion October current‑account deficit with strong year‑to‑date FDI.