By Bruno Federowski
SAO PAULO, Feb 8 Yields paid on Brazilian
interest rate futures fell on Wednesday after consumer inflation
slowed more than expected last month, boosting rate cut bets.
The official measure of consumer prices rose 0.38 percent in
January from December, the smallest increase for the month since
The figures reinforced bets that the central bank will once
again cut the benchmark overnight lending rate by 75 basis
points in a meeting later this month, to 13 percent.
According to Reuters calculations, rate future yields
indicated a 90 percent chance of a 75 basis-point cut and a 10
percent probability of a steeper 100 basis-point reduction.
"In our view, the pace of a 75 basis-point cut per meeting
adopted by the Central Bank in last January's Copom meeting is
enough to ensure inflation to the target in the next two years,"
UBS economists wrote in a note to clients.
Brazil's benchmark Bovespa stock index slipped 0.4
percent, weighed down by falling shares of state-controlled oil
company Petróleo Brasileiro SA.
Crude futures extended a recent slump on Wednesday, reacting
to an increase in U.S. inventories and a slump in Chinese
demand. The move also helped dent demand for assets from
oil-heavy economies, such as Colombia's peso.
Key Latin American stock indexes and currencies at 1440 GMT:
Stock indexes daily % YTD %
MSCI Emerging Markets 920.02 0.02 6.67
MSCI LatAm 2518.15 -0.02 7.6
Brazil Bovespa 64004.51 -0.3 6.27
Mexico IPC 46666.61 -0.13 2.24
Chile IPSA 4252.36 -0.13 2.43
Chile IGPA 21221.60 -0.13 2.35
Argentina MerVal 19147.79 -0.24 13.18
Colombia IGBC 10098.13 -0.31 -0.30
Venezuela IBC 28260.26 -0.05 -10.87
Currencies daily % YTD %
Brazil real 3.1269 -0.33 3.91
Mexico peso 20.5520 0.36 0.93
Chile peso 644.8 0.09 4.02
Colombia peso 2875.18 -0.82 4.39
Peru sol 3.293 0.06 3.67
Argentina peso (interbank) 15.6750 0.10 1.28
Argentina peso (parallel) 16.44 0.30 2.31
(Reporting by Bruno Federowski, Editing by Franklin Paul)