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.
Expected rate cut and weak data put downward pressure on yields.
