The Central Bank of Brazil (BCB) eased aggressively, signalling one more cut to come, economists at TD Securities apprise. USD/BRL is trading at 5.7158.
Key quotes
“The BCB cut by 75bps, larger than expected, and indicated an even larger cut was discussed at the meeting.”
“Inflation expectations based on the Focus survey have dropped very rapidly to 2% for 2020, from 3.1% at the previous meeting.”
“We now forecast a further 50bps in easing from the BCB at the June 17th meeting, and then a hold on the policy rate for the following three quarters, before interest rate normalization begins in Q2 2021.”
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