Treasury Direct: inflation bonds pay more than 6% per year

Public bond rates reduce gains this Wednesday morning (29). In fixed-rate securities, rates rise by up to 8 basis points, in inflation-linked bonds, rates advance by up to 6 basis points. The movement is much smaller compared to the three days of strong rise in the yield curve.

According to Luciano Costa, chief economist and partner at Monte Bravo Investimentos, the market read favorably the opinion of the Proposed Amendment to the Constitution (PEC) on Fuels presented this morning by the rapporteur Fernando Bezerra Coelho (MDB-PE). For this reason, the market begins to remove premiums from the yield curve.

The estimate is that the fiscal impact will be R$ 38.7 billion, outside the spending ceiling, but still below the R$ 50 billion estimated by the market.

“This movement is also a reflection of the fact that the pricing curve was very harsh in relation to the future path of interest rates. Two increases of 50 basis points are priced to the Selic in the short term. In 2023, the cut should be 180 basis points”, says Costa, from Monte Bravo Investimentos.

It also highlights data from the General Price-Market Index (IGP-M), which came in below the market. The IGP-M rose 0.59% in June, while market forecasts had expected a rise of 0.69%. “Agricultural prices have a favorable seasonality at the moment, causing this effect”, says Costa.

On the market’s radar and with the potential to impact future sessions, are the US inflation data (CPI) that should be released on Thursday (30).

Within Treasury Direct, Treasury Prefixed 2025 and Treasury Prefixed 2029 delivered an annual return of 12.93% and 13.05%, respectively, at 9:25 am. The profitability is higher than the 12.88% and 12.97% seen yesterday.

In inflation-linked bonds, the movement was high. Rates advanced between 2 and 6 basis points.

The IPCA+ 2026 Treasury had the highest rate hike. The public bond offered a real gain of 5.70%, above the 5.64% recorded on Tuesday (28).

The biggest real gain was seen in the IPCA+ 2055 Treasury which offered 6.02%.

Check the prices and rates of all public securities available for purchase at the Treasury Direct this Wednesday morning (29):

Source: Direct Treasure

IGP-M

The General Market Price Index (IGP-M) rose 0.59% in June, a slight acceleration from the 0.52% rise in May, the Getulio Vargas Foundation (FGV) reported this Wednesday (29) .

With greater pressure on retail and a weaker rise in wholesale, the result was below market expectations (the Refinitiv consensus projected a rise of 0.69%).

Now, the index accumulates high of 10.70% in 12 months.

Aid PEC

Senator Fernando Bezerra Coelho (MDB-PE) protocols, this Wednesday (29), his report for the now called Proposal for Amendment to the Constitution (PEC) of Aids.

The text represents the new offensive by the Jair Bolsonaro (PL) government less than 100 days before the elections and marks a change of route in relation to the initial idea with PEC 16/2022, which provided for compensation by the federal government to states that had zero ICMS. on diesel oil and cooking gas.

The so-called PEC for Fuels provided for financial assistance of up to R$29.60 billion to states that accepted: 1) zero the rate of Tax on the Circulation of Goods and on Provision of Interstate and Intermunicipal Transport and Communication Services (ICMS) charged on diesel oil and cooking gas; 2) reduce to 12% the tax rate on hydrous ethanol.

The idea had been hastily announced by President Jair Bolsonaro (PL) in a press release three weeks ago at the Planalto Palace. Amid resistance among parliamentarians and governors to the plan and the risks of judicialization and less effectiveness in reducing fuel prices to consumers, the president retreated.

The substitute, to be filed by 11:00 am (Brasilia time), maintains only the forecast of financial compensation for the ethanol production chain, in an attempt to make this product more competitive with diesel. The estimated tax impact for this measure is R$3.8 billion. The other points of PEC 16/2022 were left out.

Instead of zeroing ICMS, the report includes an increase of BRL 200.00 in monthly transfers from Auxílio Brasil (a program that replaces Bolsa Família since December 2021), which would increase to an average of BRL 600.00 – even level of emergency aid in the most critical period of the Covid-19 pandemic. And also the zeroing of the line of beneficiaries of the program, with 1.6 million families included. The cost, in this case, would be another R$ 26 billion.

The proposal will also include a readjustment of the gas allowance, in order to guarantee the purchase of a cylinder every two months, at a cost of R$ 1.05 billion, in addition to the creation of the “truck voucher”, for the diesel supply, in the amount of R$ 1,000.00, for autonomous transporters, with an estimated value of R$ 5.4 billion by the end of the year.

There is also compensation for free public transport for the elderly, at a cost of R$ 2.5 billion. All measures are valid only until the end of 2022.

With this, the PEC dos Auxílios will provide for authorization for expenses of R$ 38.75 billion outside the spending ceiling. As a way of reconciling expenses with current tax rules, the text should recognize the state of emergency as a result of fuel prices. The effects, in this case, would be restricted to the measures provided for in the PEC.

Rapporteur Fernando Bezerra Coelho, who was government leader in the Federal Senate until December 2021, announced, in a press conference held this morning, that his replacement will be linked to PEC 1/2022, and no longer to PEC 16/2022, by the greater correlation of the themes present in the new report.

Powell

Federal Reserve Chairman Jerome Powell reiterated this Wednesday, 29, that the US economy is in a “good position” and may be able to face the process of tightening financial conditions. , amid rising interest rates. During the European Central Bank (ECB) Forum, in Sintra (Portugal), Powell commented that one of the objectives of raising basic rates is to moderate economic growth, in order to balance the dynamics of supply and demand.

The leader understands that “there is still a way” to control inflation without causing a significant increase in unemployment – ​​the so-called “soft landing”. However, Powell acknowledged that recent events have made that task more challenging, particularly the war in Ukraine.