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2h ago

Inflation Expectations Ease in Brazil as Japan Reports First GDP Drop in Six Quarters

Market projections put 2025 IPCA at 4.46% after October’s 0.09% print.

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Overview

  • Brazil’s Focus survey shows inflation now seen within the 1.5%–4.5% target band, below the 4.5% ceiling for the first time this year.
  • Policy outlook in the same survey keeps the Selic at 15% at end-2025 and 12.25% at end-2026, signaling a prolonged restrictive stance.
  • The Central Bank’s IBC-Br fell 0.24% in September and 0.89% in Q3 (seasonally adjusted), the first quarterly decline in two years.
  • October’s IPCA surprise was driven largely by cheaper residential electricity after a change in tariff flag, helping anchor expectations.
  • Japan’s preliminary Q3 GDP shrank 0.4% quarter-on-quarter (-1.8% annualized), with reporting and analysts citing U.S. tariffs as one factor in weaker exports.