🔆 BUYSIDEBRAZIL | WEEKLY REPORT Persistent inflation and geopolitical risks keep caution around interest rates -May 29
✅ In Brazil, the week reinforced a still-challenging inflation backdrop, although without a relevant deterioration in composition, amid external risks linked to oil and extreme weather events. Activity continues to decelerate gradually, with incipient signs of cooling in the labor market, while the fiscal picture remains supported by strong revenues but constrained by expenditure dynamics. In this environment, the approval of the constitutional amendment ending the 6×1 work schedule adds uncertainty around costs and services, while the Central Bank’s tough communication reinforces the perception that the monetary easing cycle is likely to remain limited.
✅ Internationally, inflation remains persistent across the main economies, keeping central banks cautious and dependent on the evolution of the energy shock. The main focus of the week remained in the Middle East, where negotiations between the United States and Iran advanced unevenly, still surrounded by attacks, sanctions and disagreements over the Strait of Hormuz. The possibility of a more durable ceasefire brought some relief to oil prices, but the scenario remains subject to renewed episodes of volatility and continues to be relevant for global inflation, interest rates and risk assets.
