BRAZIL: BCB MPR in Focus Tomorrow, But Unlikely to Alter Cautious Messaging
* After Tuesday's Copom minutes provided few surprises, the BCB will publish its Q3 monetary policy report tomorrow, which is also unlikely to alter the cautious, data dependent messaging. The report will provide updated GDP and inflation forecasts, where attention will be on the Q2 28 CPI estimate, which will become the relevant policy horizon at the next Copom meeting in November. * At the recent September meeting, the Copom left its Q1 28 inflation forecast unchanged at 3.2% under the reference scenario, just above the 3% target, while reiterating that risks are skewed to the upside. Meanwhile, policymakers may also revise down their estimate of the output gap, which is currently estimated to be 0.5% below potential at end-27, following recent soft data. * Scotiabank says the focus will be on comments or insights that would provide hints on the path for the Selic rate, with the BCB's 25bp cut last week looking like being possibly the last or second to last in an easing cycle that still leaves policy settings highly restrictive, in their view. * As a reminder, BCB director David said earlier today that he sees some signs that monetary policy is taking effect, although the scenari
* After Tuesday's Copom minutes provided few surprises, the BCB will publish its Q3 monetary policy report tomorrow, which is also unlikely to alter the cautious, data dependent messaging. The report will provide updated GDP and inflation forecasts, where attention will be on the Q2 28 CPI estimate, which will become the relevant policy horizon at the next Copom meeting in November. 2% under the reference scenario, just above the 3% target, while reiterating that risks are skewed to the upside. 5% below potential at end-27, following recent soft data.
* Scotiabank says the focus will be on comments or insights that would provide hints on the path for the Selic rate, with the BCB's 25bp cut last week looking like being possibly the last or second to last in an easing cycle that still leaves policy settings highly restrictive, in their view. * As a reminder, BCB director David said earlier today that he sees some signs that monetary policy is taking effect, although the scenario for monetary policy is still uncertain. His remarks were unsurprising and had little direct impact on BRL, which remains on the backfoot (albeit off session lows) amid the significant dollar strength today. 2483, the Aug 14 high.