FX.co ★ Brazil 10-Year Bond Yield Eases After BCB

The yield on Brazilian 10-year government bonds has decreased to approximately 13.75%. This decline is attributed to clearer guidance from Copom, diminishing inflation expectations, and a softening of global long-term interest rates, all contributing to a reduced premium on long-term local debt. The central bank's decision to maintain the Selic rate at 15% and issue a cautious, almost hawkish statement has made immediate rate cuts less likely and slightly lowered the inflation outlook. This, in turn, has decreased expected long-term inflation and compressed term premiums for Brazilian bonds. Additionally, external factors have played a role, as the waning of US long-term yields from recent highs has eased the global risk-free yield curve, prompting a lowering of long-term yields in emerging markets.