The talk of the town is that the Central Bank may reduce interest rates by 20% next Wednesday. Most interest rate deductions over the last 10 years have been 0,25% basis points, from a colossal 15% nominal rate, much a do about nothing..
This Wednesday we have the confluence of two drivers, a possible 1,25 basis points reduction a a 6% real interest rate. Shifting from 6% to 4,5% is extremely significant. Shifting from 2% to 1,5% as has just happened in Europe is not.
This is obviously bad news for conservative treasury holders, which may see the Brazilian stock market, with all the good news we have already posted here, as an attractive venue.
Much much safer than government debt, meaning US and European government debt.