Treasury Direct: fixed rate interest ends the week high, while inflation bond rates fall

Public bonds traded on the Treasury Direct ended the week with different behavior in rates.

Fixed-rate papers, which started on Friday (13) with lower rates than the day before, started to offer higher interest rates in the afternoon. The remuneration of inflation-linked securities decreased in the last system update, held at 3:22 pm.

“Today the curve of DI futures contracts fluctuates little, with positive and negative variations at a level of less than 5 basis points throughout the curve”, says Igor Cavaca, manager of Warren Asset Management.

Cavaca points out that investors’ recent fears about a strong slowdown in the world economy resulting from scheduled increases in interest rates around the globe have been reducing the bet on the level of global inflation. “Given the current moment of the monetary policy cycle, market agents are beginning to measure how much there may be a delayed effect in the interest rate increases that have already occurred”, says the manager.

The week was intense in indicators in the United States. Investors continue to expect the Federal Reserve (Fed), the US central bank, to tighten interest rates more strongly to tame inflation.

On Thursday (12), Jerome Powell, chairman of the Fed, highlighted that controlling the rise in prices will not be easy and warned that he cannot promise a “soft landing” for the economy. Today, the market follows other leaders of the monetary authority and their speeches at events, in an attempt to identify clues about the Fed’s next steps.

In Treasury Direct, all three available fixed rate bonds had higher rates in the afternoon, reaching 12.73% per annum. This was the case of the 2033 Prefixed Treasury, with semi-annual interest payments, which in the morning had an interest rate of 12.68%.

Among the papers linked to inflation, the highest real interest was paid by Treasury bonds IPCA+ 2035 and 2045. Both returned a return of 5.72% per year, below the 5.76% registered that morning. The lowest remuneration was that of the IPCA+ 2026 Treasury, at 5.52% per year, also lower than the 5.56% recorded earlier.

Check the prices and rates of all public securities available for purchase at the Treasury Direct that were offered this Friday afternoon (13):

Rates offered by government bonds in the Treasury Direct on the afternoon of 05.13.2022 (Source: Treasury Direct)

New remarks from Fed officials

Federal Reserve (Fed) officials participated in different events this Friday, and each of their speeches was followed with interest by the market.

Loretta Mester, chairman of the Cleveland Fed, reaffirmed today what Jerome Powell said weeks ago: the base scenario for the next two meetings of the monetary authority is a 0.5 percentage point hike in the basic interest rate.

Mester attended the International Monetary Policy Research Forum, where he said it wouldn’t be until September that the Fed would be able to gauge where inflation is going.

“Risks to inflation remain strongly positive, especially amid the ongoing war in Ukraine and the potential for China’s zero-Covid policy to further disrupt supply chains. It will take several months of declines before it is concluded that inflation has peaked,” he said.

She added that “if by the September meeting the monthly readings on inflation provide convincing evidence that it is falling, then the pace of rate increases may slow down, but if inflation does not moderate, then a faster pace of rate hikes may slow down. fees may be required”.

Neel Kashkari, chairman of the Minneapolis Fed, said that the speed in containing the interest rate hike depends, in part, on a reduction in energy supply restrictions.

“I hope we have to do less, and we can only do less if there is more supply,” he said, during an event on energy and inflation organized by the Fed of Dallas and Minneapolis.

Readjustments, stoppages and Petrobras

In the local scene, given the fear of fiscal lack of control, attention turns to the demands for readjustment of the civil service.

The Central Bank (BC) even sent the Ministry of Economy a request for a 22% increase for its analysts and technicians, 69.6% for directors and 78.53% for the president of the municipality, reported the newspaper. The State of São Paulo. Under pressure, the BC withdrew the request on Thursday (12).

BC employees have been on strike for the second time this year since May 3. According to the agency, the reason for the retreat was “inconsistencies” in the text.

The proposal caused unease in the Ministry of Economy and was considered a “shame” by members of the economic team, as it is almost double the inflation in the 12 months to April, of 12%. If approved, the measure would represent an increase of R$ 6 thousand in the paycheck of an analyst at the top of his career.

The proposition was also considered “unreasonable” because President Jair Bolsonaro (PL) had already announced that he would give a linear adjustment of 5% to all servers and consulted the Judiciary and the Legislature, which gave the green light. A 22% increase for the BC team would provoke the wrath of the other mobilized categories.

Subsequently, it was disclosed that a letter signed by the 15 superintendents of the Securities and Exchange Commission (CVM) asks for equality for all workers in public institutions that are part of the “financial core” of the federal government. The letter was sent to the president of the CVM, Marcelo Barbosa, on Wednesday (11).

The document highlights “extreme concern with any attempt to differentiate between public service careers, especially those that make up nuclei with institutions whose mandates are complementary, such as those that make up the Financial Nucleus.”

“This could lead to significant imbalances and impacts on our servers and, ultimately, on the regular functioning of the National Financial System. In this sense, and as members of a system, we emphasize that we will continue in line with future actions to mobilize the body of careers that form the core of regulators of the financial system”, says an excerpt.

According to a note from the National Union of Civil Servants of the CVM (SindCVM), the letter signed by the superintendents is another step in the mobilization for salary readjustments. The mobilization already includes a “standard operation”, with a 50% reduction in the goals of the servers, approved in a meeting of SindCVM.

Discontent is also growing among truck drivers, who have returned to discuss a national strike because of yet another diesel price readjustment announced by Petrobras.

Videos of truck drivers go viral on social media. In them, workers criticize the fact that the total amount paid at the pumps exceeds R$ 5,500, to store just over 600 liters of fuel. The liter, in the region of Barreiras, in Bahia, is sold for R$ 8.24.

Faced with the electoral impact that the increases announced by Petrobras may have on the image of President Jair Bolsonaro (PL), the country’s representative said yesterday (12) that he will appeal to the courts to try to force Petrobras (PETR3;PETR4) to reduce the price of fuels.

He admitted, however, that the possibilities of obtaining a favorable decision are remote and complained of interference by the Judiciary in government measures to face the effects of high inflation.

The president opened war against the oil company for the constant readjustments in the price of fuels, which influence the increase in inflation. Unable to interfere in the state-owned company, the chief executive dismissed last Wednesday (11) the minister of Mines and Energy, Bento Albuquerque.

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