BRAZIL: DI Rates Trade Mixed As USD Rises; Domestic Politics Weighs

(RTTNews) - The one-day interbank deposit futures rates (DI rates) in Brazil are trading mixed, falling in the shortest maturities while rising in the longer ones. As the locally traded U.S. dollar rises, pushing rates higher, the support of centrist parties to Geraldo Alckmin's presidential bid puts opposite pressure on rates.

"The domestic scenario is less pressured because of political issues. The centrist parties formalized today the support for Alckmin's candidacy, which ends up giving a calm in the electoral scene," said the director of Correparti Corretora, Ricardo Gomes.

Alckmin is the candidate who has most defended economic and fiscal reforms, which makes him well regarded by investors.

Gomes points out that even internal "optimism" with Alckmin does not happen without a bit of caution, since, according to him, investors now wait to see if the PSDB's presidential bid has strengthened.

Near the end of the session, the January 2019 DI contract rate was stable at 6.625%, while the January 2020 DI rate was at 7.92%, from 7.93% in the previous settlement. The January 2021 DI contract rate was at 8.69, from 8.94%.