FX.co ★ Brazil 10-Year Bond Yield Drops Amid Flight to Safety

The yield on 10-year Brazilian government bonds has decreased to approximately 14.7%, moving away from the nearly one-month peak of 15.11% reached at the end of March. This shift is largely due to investors seeking stability amid intensifying international trade disputes. The increase in risk aversion—prompted by President Trump's tariff policies and China’s extensive countermeasures—has heightened fears of a worldwide economic slowdown. Consequently, this situation has amplified the demand for secure assets, thereby reducing yields. In addition, the overall decline is exacerbated by pressures on central banks to relax monetary policies in an attempt to counter the expected economic downturn. On the domestic front, although there has been some advancement in fiscal consolidation, demonstrated by a primary surplus of R$ 104.1 billion and a reduction in gross public debt to 75.3% of GDP as of January, persistent fiscal concerns continue to compel investors to seek high risk premiums.