Brazil Markets Rebound as Central Bank Sells Dollars and IPCA-15 Prints 0.25%

Overview

• Market consensus in the Boletim Focus lowered the 2025 IPCA forecast to 4.33%, with the Selic held at 15% and expectations for a decline toward 12.25% by end-2026.
• The Banco Central conducted line auctions offering up to US$2 billion and sold US$500 million, helping the real recover to R$5.531 after touching R$5.584 on Monday amid heavy year-end remittances.
• Interest-rate futures jumped early then retreated to close lower as positions were adjusted, with some relief after Jair Bolsonaro’s planned interview was canceled.
• Brazil’s IPCA-15 rose 0.25% in December, taking 12-month inflation to 4.41%, which sits below the 4.5% upper band of the target range.
• U.S. third-quarter GDP came in at an annualized 4.3%, lifting Treasury yields and transmitting volatility to local assets, while European equities ended mixed and miners benefited from strong metals prices.