Brazil mid-August inflation rises 4.24% year-on-year, first monthly drop in a year
The Brazilian Institute of Geography and Statistics (IBGE) reported on the 26th that the mid-August consumer price index (IPCA) rose 4.24% year-on-year, while falling 0.40% month-on-month. The monthly decline was the first since August 2025, signaling easing inflationary pressures. The annual rate slowed from July's 4.52% increase and came in below the median forecast of 4.34% in a Reuters poll. Within the central bank's target range, the monthly drop also exceeded the expected 0.30% decline. The downward factors included declines in housing costs of 1.41%, transportation of 1%, and food and beverages of 0.57%. The central bank this month cut its policy rate by 25 basis points to 14%, marking the fourth consecutive rate cut and leaving room for further easing. The next meeting is scheduled for September 15-16.
Commerzbank sees Brazilian Real supported by hawkish central bank
Commerzbank FX analysts Norman Liebke and Michael Pfister see the Brazilian Real supported by the Brazilian Central Bank’s hawkish stance and still-elevated real interest rates. The analysts note that election risks could weigh on the currency in the near term, but they expect renewed gains afterward. They highlight that the central bank’s commitment to fighting inflation and the high level of real rates provide a supportive backdrop for the Real. The view comes as markets assess the outlook for Brazilian monetary policy and political developments.
Societe Generale flags election and fiscal risks for Brazilian real
Societe Generale's Dev Ashish has flagged growing election and fiscal risks weighing on Brazilian assets. The Brazilian real has underperformed in Latin America, with USD/BRL nearing its 200-day moving average at 5.2042 and the Bovespa breaking below its long-term average.
Societe Generale flags election risks for Brazilian real carry trade
Societe Generale strategists warn that election risks threaten the Brazilian real carry trade. They note USD/BRL has formed a higher low and is testing its 200-day moving average near 5.22, with upside projections toward 5.34–5.38.
Brazil's central bank cuts rate by 0.25% to 14%, signals further reduction in September
Brazil's central bank unanimously decided to cut its policy interest rate by 0.25 percentage points to 14.00%, the lowest level since March 2025 and the fourth consecutive rate cut, in line with market expectations. It left the door open for further reductions at its September meeting, stating that the decision will depend on economic data received before the next meeting. The Monetary Policy Committee remains concerned about the persistent long-term inflation outlook breaching the target range, and reiterated that it is monitoring closely as this could make disinflation more economically costly. The central bank kept its 18-month policy horizon inflation forecast unchanged at 3.2%, while lowering its 2026 inflation forecast to 5.1% and raising its 2027 forecast to 3.8%.
Rabobank sees weaker Brazilian Real outlook on disinflation and fiscal risks
Rabobank’s Brazil weekly notes that the Brazilian Real recently appreciated to BRL 5.0587 per Dollar, ranking among the top emerging-market performers, but the bank sees a weaker outlook ahead driven by disinflation and fiscal risks.
Brazil's June industrial output falls 1.8% month-on-month, weighed down by high interest rates
Brazil's industrial production in June fell 1.8 percent from the previous month, marking the steepest decline since December 2025, according to the Brazilian Institute of Geography and Statistics. High interest rates continued to weigh on activity, and the result undershot the 0.8 percent drop forecast by economists polled by Reuters. Output declined across all four major surveyed sectors, with consumer goods posting the largest drag at a 3.7 percent decrease. On a year-on-year basis, production rose 1.7 percent, missing the 3.0 percent increase expected by economists. Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said Brazil's industrial sector is under pressure and the case for gradual monetary easing is strengthening. The Central Bank of Brazil is expected to deliver a fourth consecutive 25-basis-point rate cut on the 5th, bringing the policy rate to 14.00 percent.
Global Economic Calendar This Week: BOJ Rate Meeting, China-US PMI, US Employment Data
The global economic calendar for the week of July 31 to August 6, 2026, features several key highlights. On Friday, July 31, the Bank of Japan will hold its monetary policy meeting and announce its interest rate decision, while China will release the July manufacturing and services PMI from the National Bureau of Statistics, and the US will report the final University of Michigan consumer sentiment index. Then on Monday, August 3, several countries will announce final manufacturing PMI figures from S&P Global, including the US which will also report the ISM manufacturing index. On Tuesday, August 4, the US will release the June Job Openings and Labor Turnover Survey, or JOLTS, and factory orders. On Wednesday, August 5, Indonesia will report second-quarter GDP, the Reserve Bank of India will announce its policy rate, and the US will have the ADP private employment report, as well as the final services PMI and the ISM services index. The week wraps up on Thursday, August 6, with the Central Bank of Brazil announcing its interest rate, and the US reporting weekly jobless claims.
Coffee Prices Fall Amid Weakness in the Brazilian Real
Coffee prices fell sharply today as weakness in the Brazilian real triggered long liquidation in futures. September arabica coffee dropped 11.70 cents, or 3.45%, while September ICE robusta coffee declined 88 dollars, or 2.27%. The Brazilian real hit a 2.5-week low against the dollar, encouraging export sales from Brazil’s coffee producers. The decline comes despite recent support from a slow Brazilian harvest and heavy rain in Minas Gerais, where rainfall was 2700% of the historical average last week. Rising robusta inventories and a USDA forecast for record global coffee output in the 2026-27 season also weighed on prices.
Societe Generale says USD/BRL below 50-day moving average opens move to 5.00
Societe Generale highlights that USD/BRL has retreated to 5.07 after threatening 5.20 earlier in July, with the Brazilian Real retaining a firm tone following soft US Producer Price Index data and lower Treasury yields. The bank notes that the pair has moved below its 50-day moving average, which opens a potential move toward the 5.00 level.
Rabobank forecasts year-end weakness for Brazilian Real against US Dollar
Rabobank strategists Mauricio Une and Renan Alves forecast year-end weakness for the Brazilian Real against the US Dollar. The US Dollar ended the previous week at Brazilian Real 5.1086, with the Brazilian Real appreciating 1.2% and ranking third among 24 emerging currencies.
Coffee prices surged today, with September arabica coffee up 11.00 cents to a 3.33% gain and September ICE robusta coffee up $116 to a 3.03% gain. The rally was fueled by a strengthening Brazilian real, which hit a 3.5-week high against the dollar, discouraging export sales from Brazil's coffee producers. Illiquid trading conditions, exacerbated by ICE raising margin requirements twice last week, have amplified price volatility as many commodity funds closed positions. Additionally, a delayed Brazilian coffee harvest—52% complete as of July 1 versus the five-year average of 55%—and concerns that an emerging El Niño pattern could damage next year's crop provided further support.
Brazil's June CPI slows to 4.64% year-on-year rise
Brazil's consumer price index rose 4.64% in June from a year earlier, slowing from May's 4.72% increase, according to the Brazilian Institute of Geography and Statistics. On a month-on-month basis, prices rose 0.16%, decelerating from 0.58% in May and coming in below the 0.31% forecast in a Reuters poll of economists. The slowdown in the annual rate is the first since February, though it remains above the central bank's target of 3% plus or minus 1.5 percentage points. Food and beverage prices fell month-on-month for the first time since November last year, the biggest factor holding down the overall increase. Brazil's central bank last month cut its key policy rate by 25 basis points to 14.25%, the third consecutive meeting with a reduction, and a senior economist at Intel noted that underlying inflation is not re-accelerating, suggesting that monetary tightening is working.
UiPath vs. Nu Holdings: Which Disruptive Growth Stock is a Buy?
UiPath appears to be a buy right now, while Nu Holdings faces near-term uncertainty from Brazil's high interest rates. UiPath is evolving into an enterprise AI orchestration platform, with AI product adoption driving higher customer spending and deeper enterprise relationships. The Zacks Consensus Estimate for UiPath's second-quarter fiscal 2027 earnings is 15 cents per share, flat year-over-year, on revenues of $397.6 million, up 9.9%. For full fiscal 2027, earnings are projected to increase 11.1%, followed by 12.7% growth in fiscal 2028, with revenues rising 10.4% and 8.2% respectively. Nu Holdings trades at roughly 12.63 times forward earnings, with expected revenue growth of 39% and EPS growth of 34% this year, and generates a 13.4% return on invested capital and a 30.9% return on equity. However, Brazil's central bank aggressively raised benchmark interest rates from 10.5% in June 2024 to 14.25% in June this year, then only slightly reduced them to 14.5%, heightening fears of an economic slowdown and consumer financial stress that could pressure Nu's loan book. UiPath carries a Zacks Rank #2 (Buy) and Nu carries a Zacks Rank #3 (Hold).