BRAZIL: DI Rates Remain Little Changed With Focus On Truckers Crisis

(RTTNews) - The one-day interbank deposit futures rates (DI rates) in Brazil are unchanged in the start of the session, as traders analyze the consequences of a deal between the government and truck drivers to end a five-day strike that led to fuel and food shortages in Brazilian cities.

The January 2019 DI contract rate was at 6.655%, from 6.660% yesterday, while the January 2020 DI rate was stable at 7.54%. The January 2021 DI contract rate was at 8.68%, from 8.69%. The locally traded U.S. dollar was rising 0.13%, to R$ 3.6540.

"The news of the agreement, with the government footing a R$ 5 billion bill in subsidies, is negative news for the fiscal side," said Renascenia Corretora's fixed income operator, Lu?s Felipe Laud?sio. He said that the truck driver's demonstrations remain a hotbed of tension and should affect local markets again, widening the yield curve at the long end.

A derivatives manager reminded that Petrobras' president, Pedro Parente, has been the target of attacks by politicians for defending the company's fuel pricing policy. "The fear of chaos generated stress and that spread to the assets," he said.

CM Capital Markets added that "the government has announced an agreement to suspend the halt for 15 days, but the leaders of the category have not ensured that their affiliates would return to work today," another risk factors.