🔆 BUYSIDEBRAZIL | WEEKLY REPORT Inflation Delivers an Upside Surprise, Copom Communication Introduces a Slightly More Dovish Nuance, and PLP 299/2026 Is Expected to Enable Compliance with the 2027 Fiscal Target — Nov 13
✅ In the inflation scenario, October’s IPCA came in below expectations, with an improvement in the composition of core inflation measures, although a significant part of the result was influenced by one-off factors.
✅ In economic activity, retail and services data reinforce the loss of consumption momentum, with signs of tighter financial conditions becoming more evident in segments sensitive to income and credit.
✅ In monetary policy, the Copom minutes introduced a more dovish nuance, acknowledging that the slowdown in demand may contain the second-round effects of supply shocks. Nevertheless, we maintain our expectation of the Selic rate at 13.75% for an extended period.
✅ On the fiscal front, PLP 299/2026 is expected to enable compliance with the 2027 target, but does not eliminate the structural challenges facing public finances.
✅ Abroad, US headline CPI slowed, while China’s producer price inflation accelerated again, pointing to mixed signals for the global inflation outlook.
