Brazil: Another 100 bp cut by COPOM at the next meeting? - BBH

After markets closed last night, COPOM cut rates 100 bp to 9.25%, as expected and the statement seemed to downplay political and fiscal uncertainty, suggesting another 100 bp cut at the next meeting, explains the research team at BBH.  

Key Quotes

“Markets are pricing in a 75 bp cut to 8.50% at the September 6 meeting followed by a 50 bp cut to 8.0% at the October 25 meeting, where it is expected to stay through the end of 2018.  With inflation running so low, we see downside risks to the SELIC forecasts and potential for a dovish surprise at the December 6 meeting.”