Brazil's August Consumer Price Index Expected to Fall 0.26%
Brazilian analysts forecast a negative inflation reading for August driven by electricity subsidies, while US CPI data and Federal Reserve rate hike probabilities dominate international markets.
On Friday, Brazil released its most anticipated economic data of the week: the monthly Consumer Price Index (IPCA) for August. According to Bradesco analysts, the index is expected to show a 0.26% decline, primarily attributed to a drop in electricity prices caused by bonuses from Itaipu. These expectations suggest that core inflation remains stable, consistent with recent trends.
Internationally, attention shifts to US consumer price data released after strong payroll figures. Analysts at Bradesco noted that future interest rate contracts indicate a 70% probability of the Federal Reserve raising rates by 0.25 percentage points during its September meeting scheduled for mid-week.
Brazilian stock markets reacted positively on Thursday, with the Ibovespa closing above 188,000 points. This performance was driven largely by banking sector gains and reinforced by a new Datafolha survey showing intense competition in the upcoming October presidential election.
