🔆 BUYSIDEBRAZIL | WEEKLY REPORT Middle East uncertainty and Treasury moves mark the week – 21/08
✅ In the international backdrop, market attention was focused on developments in the Middle East conflict and the behavior of long-term U.S. yields. Tensions involving Iran remained elevated, particularly amid uncertainty surrounding the Strait of Hormuz, a key route for global oil trade. President Donald Trump ruled out extending the 60-day truce and adopted a less conciliatory stance toward Tehran, reducing expectations of a near-term diplomatic solution.
✅ Meanwhile, in the United States, the U.S. Treasury announced changes to its debt buyback program. Starting September 9, the maximum size of operations involving nominal securities in the 10-to-20-year and 20-to-30-year sectors will increase from US$2 billion to at least US$4 billion per operation. The increase is intended to improve secondary-market functioning and facilitate trading in longer-dated securities, at a time when long-end yields remain elevated.
✅ In Brazil, the main highlight of the week was the release of the June IBC-Br, which reinforced signs of slowing economic activity at the end of the second quarter. The result was consistent with previously released sectoral surveys, which showed a sharper contraction in industrial production, mixed retail sales performance, and broadly flat services activity. In particular, weakness across sectors more sensitive to financial conditions suggests that the cumulative effects of a prolonged period of high interest rates are becoming increasingly visible in economic activity.
