Brazil Goes Big With Rate Hike

Brazil’s central bank raised rates by 50bp to 8.00% at Wednesday’s meeting, in a unanimous decision, it says, citing inflation as a key factor in its choice. Ahead of the meeting, market analysts debated a 25bp or 50bp raise, and many anticipated a split decision. “This Copom decision is indeed a surprise to the market that was mostly awaiting for a 25bps hike after today’s lacklustre GDP numbers. The curve was already pricing around 37bps for this meeting but rates should have a big correction on Friday’s market, after Thursday’s holiday,” nomura says.