Copom dialling down the tightening cycle

The communications following the Brazilian central bank meeting yesterday, at which the Selic rate was hiked by 100bp (to 12.75%), confirm that the tightening cycle is nearing an end. But even so, with inflation set to remain firmly in double digits over the coming months, we think that the Selic rate will be raised a little further than most expect. We expect another 75bp of hikes in the cycle to 13.50% whereas the market and consensus envisage an additional 50bp of hikes. EM Drop-In (5^th May, 10:00 EDT/15:00 BST): Join Shilan Shah for our latest monthly session on the big macro and markets stories in EMs. This month, Shilan and the team will be talking Russian gas, FX weakness and surging food prices. Register now