FX.co ★ Brazil 10-Year Bond Yield Retreats

The yield on Brazil’s 10-year government bond slipped to 14.2% in late May, easing back from its highest level in over a year as global bond markets steadied. Investors continued to track progress in peace talks between the US and Iran. With Pakistan mediating, the two sides moved somewhat closer to a possible agreement, though persistent disputes over Tehran’s uranium stockpiles and control of the Strait of Hormuz still blocked a final deal. On the domestic front, markets digested another increase in inflation and Selic rate projections in the Focus survey, as well as the March decline in the IBC-Br economic activity index. Investors also weighed the outlook for US monetary policy after comments from Federal Reserve Governor Christopher Waller strengthened expectations that US interest rates may stay higher for longer.