Brazil Treasury auction lifts benchmark DI yields

On June 2, Brazil's Treasury sold a R$17.3 billion batch of fixed‑rate bonds (LTNs and NTN‑Fs) at nominal yields of 14.35% to 14.58% per year. The pricing, viewed by market participants as a “toll” on investors, pushed the benchmark DI rate for January 2029 up to about 14.35% and added pressure along the entire yield curve.

Earlier on June 1, DI rates had already risen after gains in U.S. Treasury yields and expectations of further Federal Reserve rate hikes. The DI for January 2028 finished at 14.095%, ending a seven‑day streak of declines, while the longer‑term DI for January 2035 rose to 14.33%. Analysts linked the move to the Treasury auction’s high nominal rates, warning that such pricing could fuel future fiscal risk and increase the cost of rolling over Brazil’s debt.