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Oil Shock Lifts Brazil Inflation Forecast to 4.80% as Markets See 13% Selic

Rising oil prices linked to USIran tensions are shrinking the Central Bank’s room to ease next week.

Overview

  • Market expectations in the Focus survey published Monday rose for 2026 IPCA to 4.80% for a sixth straight week, with year‑end Selic lifted to 13% and 2027 views nudged to 3.99% inflation and 11% rates.
  • Following weekend flare‑ups and a US seizure of an Iranian cargo ship, Brent settled near $95.42 and WTI at $89.61 after Iran again closed the Strait of Hormuz.
  • Brazilian assets were steady to higher, with the dollar at R$4.974 and the Ibovespa up 0.20% as Petrobras shares benefited from stronger crude.
  • Short‑dated interest‑rate futures rose as traders prepared for a cautious Copom next week after recent Central Bank remarks emphasized careful calibration over faster cuts.
  • The Focus report, a weekly poll of more than 100 institutions, now places 2026 inflation above the 4.5% tolerance band, which can squeeze households if fuel and other regulated prices keep climbing.