Brazilian swap rates rose for a second day after a bigger-than-forecast boost in economic activity bolstered wagers that the central bank will refrain from cutting borrowing costs today.
Swap rates on the contract due in January 2015 climbed three basis points, or 0.03 percentage point, to 7.74 percent at 9:52 a.m. in Sao Paulo. The real was little changed at 2.0374 per U.S. dollar.
The seasonally adjusted economic activity index, a proxy for gross domestic product, rose 0.4 percent in November, the central bank reported today. The median forecast of economists surveyed by Bloomberg was for a 0.2 percent increase.
“The indicator was a surprise in relation to the market’s estimates,” Alfredo Barbutti, an economist at Liquidez DTVM in Sao Paulo, said in a phone interview.
Policy makers have left the benchmark rate at a record low 7.25 percent since October. The central bank will hold borrowing costs steady at its two-day meeting that ends today, according to all of the 56 economists surveyed by Bloomberg.
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