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MARKETS: DI rates trade lower on weak economic activity

Feb 14, 2020 (Grupo CMA via COMTEX) --

São Paulo, 14 - The one-day interbank deposit futures rates (DI rates) in Brazil trade lower as investors react to further indication of weak economic activity in the final stretch of 2019. Market players also monitor the falling locally traded U.S. Dollar after further intervention by the Brazilian Central Bank (BCB) and the coronavirus outbreak newsflow. "Economic growth remains subdued, so it's likely to expect a curve down again," notices a foreign bank's treasury director, referring to the weak figures of the Central Bank's economic activity index (IBC-Br) released in the morning. However, he ponders that low growth combined with a weak local currency is "definitely bad". "The BCB did very well, though late," he notes. For him, it should not be long before investors also begin to test the Central Bank stance. "The market will probably test the BCB's strategy in the second half", he warns. Near the middle of the session, the January 2021 DI contract rate was at 4.250%, from 4.260% in the previous settlement. The January 2022 contract was at 4.76%, from 4.83%. The January 2023 contract was at 5.33%, from 5.41%, while the January 2025 contract was at 6.02%, from 6.08%. Olívia Bulla / Agência CMA Translation by Ricardo Gozzi

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