Treasury Direct: return of Prefixed 2033 returns to record level

Economic activity data are in the focus of investors this Thursday (2). Today, the Gross Domestic Product (GDP) for the first quarter was presented, which increased 1% compared to the previous quarter – a performance that came below market estimates.

US private sector job creation (ADP) numbers are also in the spotlight. According to the Labor Department, 128,000 jobs were created – a percentage that was below analysts’ projections.

The day before, the Federal Reserve (Fed), the American central bank, highlighted in the Beige Book that the “tight” job market is its main challenge in the fight against rising prices.

Also pay attention to oil prices. Investors await the announcement of the meeting of the Organization of Petroleum Exporting Countries and allies (OPEC+), which may dictate further increases or not in the production of the commodity.

In the Treasury Direct, the interest offered by public bonds operate on the rise this Thursday morning. Fixed rates show a more expressive rise than inflation-linked papers.

Highlight for the Fixed-rate Treasury 2033, with semi-annual interest, which presented an interest of 12.73%, at 9:20 am today, against 12.65% the day before (1). This percentage is close to the record registered by this security in the amount of 12.78% and which was beaten on May 9. The paper began to be traded this year.

The other fixed-rate securities, however, were further away from historical values.

Among inflation-linked securities, the highest real return was offered by the IPCA+2055 Treasury, in the amount of 5.86%. That is, above the 5.81% seen the day before.

Check the prices and rates of all public securities available for purchase at the Treasury Direct this Thursday morning (2):

Source: Direct Treasure

GDP

The highlight of the local scene is in the GDP numbers. The 1.0% rise in the first quarter represents the third positive result for the indicator, since the 0.2% decline in the second quarter of 2021.

In the annual comparison, with the first quarter of last year, GDP grew 1.7% and was slightly below expectations (1.8%).

In recent weeks, economists have started to revise GDP for the first quarter and for 2022 upwards, due to higher-than-expected economic activity at the beginning of the year, but at the same time they have cut forecasts for 2023, amid the Bank’s monetary tightening cycle. Central.

From the point of view of production, the rise was driven by the services sector, which represents 70% of Brazil’s GDP and grew by 1.0%. In industry there was stability (up 0.1%) and in agriculture there was a decrease of 0.9%, due to the drought in the South region.

From the perspective of demand, household consumption grew 0.7% and government consumption remained stable (up 0.1%). Investments, in turn, fell by 3.5%. In the external sector, imports of goods and services declined by 4.6% and exports rose by 5.0%.

In the assessment of Danilo Passos, economist at the manager WHG, the number was in line with the house’s projection and did not come as a big surprise. According to him, the expectation was that the GDP of now would be very much determined by trade and consumption, in view of previous research that came out of the Brazilian Institute of Geography and Statistics (IBGE).

“Some of this is still linked to the reopening and resumption of the economy. There is a remnant of this end of the pandemic helping the activity”, highlights the economist.

The number also does not change much of the house’s projections for the year, says Passos. He says that the manager is estimated to rise by 1.9% for the indicator in 2022.

In the analysis, the economist says that economic growth should remain positive in the second quarter of this year and slow down in the second half. The reason, he explains, is that in the second half of the year the positive sentiment generated by the reopening of activities would have passed and the effects of monetary policy would have been more noticeable.

Electricity bill and PIS and Cofins taxation

On the political scene, investors are monitoring the approval yesterday (1) by the Senate of a bill (PL) that provides for the return of excess tax amounts collected by electricity distribution companies. In practice, the measure can reduce the value of the electricity bill for the consumer. Project goes to the Chamber.

According to the approved text, the National Electric Energy Agency (Aneel) will implement the allocation of credits referring to the Program for Social Integration and Formation of Public Servant Assets (PIS/Pasep) and the Contribution on the Financing of Social Security ( Cofins) that companies overcharged their users. This destination, according to the project, will take the form of tariff reduction.

Yesterday (1) the Chamber approved a provisional measure (MP) that reformulates the taxation of the Social Integration Program (PIS) and Social Security Financing Contribution (Cofins) on fuel alcohol sold by cooperatives directly to the retail sector. The text goes to the Senate for analysis.

Eurozone and China

On the foreign scene, investors are echoing the news that Chinese state-owned banks will mobilize an 800 billion yuan (about US$120 billion) credit line to finance infrastructure projects as part of the government’s efforts to spur the second largest economy on the planet.

The appeals were announced at a State Council meeting chaired by China’s Premier Li Keqiang, according to a statement released on Thursday.

The amount will be distributed within the scope of a package with 33 fiscal and monetary measures announced last Tuesday (31). The aim is to stem the recent weakening of economic activity in the Asian country, which has adopted strict restrictions on mobility in several cities after new outbreaks of coronavirus.

Also noteworthy was the release of the Eurozone Producer Price Index (PPI), which jumped 37.2% in April compared to the same month last year, gaining strength from the annual increase of 36.9% (revised data) observed in March, according to data published today by Eurostat.

The April result, however, came below the expectations of analysts consulted by the The Wall Street Journalwhich predicted a rise of 38.6%.

In relation to March, the block’s PPI increased by 1.2% in April. In this case, the market forecast was for an increase of 2.3%.

Excluding energy prices, which tend to be volatile, the eurozone PPI rose 2.6% in April from March and rose 15.6% year-on-year.