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2018.07.1314:48:00UTC+00BRAZIL: DI Rates Open Lower In Correction Movement

The one-day interbank deposit futures rates (DI rates) in Brazil opened lower Friday, taking off from the locally traded U.S. dollar, after Thursday's rise, under the impact of the draft budget approved by the Congress.

Near the middle of the session, the January 2019 DI contract rate was at 6.85%, from 6.84% in the previous settlement, while the January 2020 DI rate was at 8.26, from 8.32%. The January 2021 DI contract rate was at 9.25, from 9.31%.

"Today the bias is to correct the rates after yesterday, with the market discouraged regarding the future of the country's fiscal situation, which caused rates to open a lot, especially the shorter maturities," said Toro Investimentos' analyst Thiago Tavares.

For the next week, investors wait new inflation figures in Brazil, which "should easily record results below half of June," said Infinity chief economist Jason Vieira. Inflation recorded last month had the highest increase for the month since 1995, at +1.26%, impacted by the truckers' strike in May that pressured food and fuel prices.

"This is a brief relief from future interest rates, which may again insist on seeking premiums through monetary tightening due to exchange rate pressure," pointed out Vieira.

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