Brazil's future interbank rates dip after weak industrial output and US Treasury holiday

Future rates on Brazil's interbank deposits (DI) fell on Friday, July 3, as the market adjusted to weaker-than-expected industrial production data and the absence of US Treasury pricing due to an Independence Day holiday. The DI rate for January 2028 slipped to 14.105%, down 13 basis points from the previous session, while the longer‑dated January 2035 rate fell to 14.41%, an 8‑basis‑point decline.

IBGE reported a 0.2% drop in industrial output in May versus April and a modest 0.2% rise versus May 2023, missing Reuters poll expectations of 0.3% month‑on‑month growth and 1.3% year‑on‑year. Analysts see the data strengthening expectations that Brazil’s central bank could cut the Selic rate by 25 basis points in August. Fixed‑income specialist Santiago Schmitt noted that a weak US payroll report also eased pressure on global rates, helping the DI curve retreat despite strong domestic Treasury auctions.

The combination of lower industrial activity, reduced liquidity from the US market closure, and ongoing political news kept the DI curve on a modest downward trajectory.