2018.07.0514:55:00UTC+00BRAZIL: DI Rates Open Mixed, But Falling USD Brings Negative Trend

The one-day interbank deposit futures rates (DI rates) in Brazil opened mixed Thursday, but with a trend to fall. DI rates began the session seeking a greater correlation with the locally traded U.S. dollar, mainly in the intermediate vertices, in a movement already tested near to the closing of Wednesday's session. Still, the forward curve has little oscillation, with investors attentive to the external scenario.

"After days of intense detachment, the local interest curve seeks a correlation with the other assets," said Luis Felipe Laud?sio, the fixed income trader at Renascen?a Corretora. "But I see no reason to encourage [business] and we should not have major moves unless that something happens abroad," he said.

Low liquidity has been marking this beginning of July, both because of the World Cup and school holidays. In fact, after the pause for Independence Day in the United States, the American calendar gains strength, but investors adopt a defensive stand, on the eve of another soccer match of the Brazilian national team in the World Cup on Friday and a holiday in Sao Paulo on Monday.

"These events are reducing the business turnover and, consequently, the liquidity of the markets, distracting investors," said Advanced Brokerage's analyst Alessandro Faganello.

Near the middle of the session, the January 2019 DI contract rate was at 6.850%, from 6.845% in the previous settlement, while the January 2020 DI rate was 8.35%, from 8.37%. The January 2021 DI contract rate was at 9.29%, from 9.32%.