Overview

• Brazilian DI futures fell sharply after September IPCA rose 0.48% month over month, below forecasts, with core services up just 0.03%.
• Markets extended the move as Congress effectively rejected MP 1.303, easing fiscal and funding concerns tied to its proposed changes in fixed‑income taxation.
• The scrapped measure had aimed to unify a 18% income‑tax rate across investment horizons and was projected by the finance minister to raise roughly R$17 billion in 2026.
• Early Wednesday gains tied to a Genial/Quaest poll showing a slight improvement in President Lula’s approval faded as the MP setback crystallized.
• FOMC minutes highlighted elevated upside inflation risks alongside higher downside risks to employment, while ECB minutes underscored no policy response to small inflation swings and keeping options open.