ZZZZ

It's the most tiresome day of the month again. Risks point to a better than expected US payroll figure, because that always seems to be the case these days. More later after the sacrifice at the altar of statistical insignificance....
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Anonymous
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May 4, 2007 at 1:59 PM ×

Macro Man, a week ago you asked if there was the notion in Brazil of the costs of FX intervention. I said there wasn´t.

After the CB bought $4 billion yesterday (and is expected to buy 2 billion more today), people (and all the major newspapers) are starting to ask where this is going to stop, occasionally mentioning that the carry is actually paid by the Central Bank.

avinash goldfish

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Macro Man
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May 4, 2007 at 2:44 PM ×

Very interesting....thanks for the insight there. The presumption has got to be that they will cut rates even more aggressively, both to reduce the BRL's appeal and to reduce the sterlilization costs.

Alternatively, they could conduct unsterilized intervention, thereby easing monetary conditions another way....

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Anonymous
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May 4, 2007 at 3:19 PM ×

They are already not sterilizing 100% of their interventions, which is showing in the money markets... but there really aren`t many reasons to believe in a more agressive rate cut next month (or on a hypothetical extraordinary meeting which part of the market has unbelievably come to expect...). Interesting times down here, really...

avinash goldfish

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