Interest rates: Treasuries and oil weigh, with a sharp drop in local futures rates
The interest market was for another session towed by the external environment, which overlapped in the afternoon to put rates down along with Treasury yields and the new decline in . Fears about a crisis in the financial system, with new problems in the US, weighed again on assets, on the eve of monetary policy decisions both there and here.
Internally, expectations for the presentation of the fiscal framework grew this Friday when the proposal was delivered to President Luiz Inácio Lula da Silva. In the accumulated result for the week, there was a loss of premium in all contracts, more accentuated in the intermediate vertices, precisely those that reflect the perspective for the new monetary policy cycle. The market increased the probability that it will start in May, with the curve pointing to a 40% chance of a drop of 0.25 percentage points from the current 13.75%.
The Interbank Deposit (DI) contract rate for January 2024 ended at 12.97%, from 13.035% yesterday in the adjustment, and the DI for January 2025 fell from 12.182% to 12.075%. The DI for January 2027 closed at a rate of 12.485%, from 12.593% yesterday in the adjustment, and the DI for January 2029, at 12.940%, from 13.033%.
After spending the morning oscillating around adjustments, without a firm direction, interest rates engaged in a downward movement in the afternoon, as fears grew that the liquidity issues that are still, for the time being, restricted to a few institutions could spread by the banking system.
Bankrupt SVB’s parent company, SVB Financial, has filed for bankruptcy following the bank’s failure last week. Also, access to the so-called rediscount window loan line soared to US$ 152.9 billion, a historic record and surpassing the peak of US$ 111 billion recorded during the 2008 financial crisis.
As the risk of a “credit crunch” would put pressure on central banks to adopt a more dovish posture, the Treasuries curve sank, especially the interest rate, which reached below 3.80% at the lows of the day. The da also fell significantly, below 3.40% in the late afternoon.