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10m ago

Brazil’s Inflation Preview Reaches Target Ceiling, Recasting Odds of Early Selic Cuts

The 12‑month IPCA‑15 at 4.50% tests central‑bank signals of an approaching easing cycle.

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Overview

  • IBGE’s IPCA‑15 rose 0.20% in November, lifting the 12‑month rate to 4.50%, the upper limit of the inflation target band.
  • Short‑term interest futures opened higher after the release, with traders reacting to firmer services components and a higher diffusion of price increases.
  • On the prior session, futures rates had fallen after BC director Nilton David said the next change in the Selic should be a cut, even as President Gabriel Galípolo stressed the legal 3.0% target and warned it may be missed during his mandate.
  • The real strengthened on Tuesday, with the dollar around R$5.376, as softer U.S. data and Fed succession speculation lowered U.S. yields and buoyed risk assets.
  • Investors continue to monitor a rift between the government and Congress as a fiscal risk while weighing whether a cutting cycle begins in January or March 2026.