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The election race has barely begun, yet assets are already priced as if we were less than a month away from the decision. An exaggeration? It seems so to me. Will the market gradually adjust? I believe so. In the meantime, we continue to monitor the dollar's volatility, which is driven entirely by domestic political noise. Furthermore, and no less importantly, we must remember that the end of the year is seasonally unfavorable for our currency due to the outflow of corporate profit and dividend remittances. In other words, what is usually bad is being made worse solely by unconfirmed hypotheses. One thing we can't complain about in Brazil is monotony!

With the dollar under pressure and the Central Bank insisting on a hawkish stance in favor of maintaining high interest rates, the yield curve has risen again. Even with the most recent inflation indicators showing some relief, it does not seem to have been enough to convince the Central Bank that Selic rate cuts could begin as early as the next decision in January 2026. This, combined with an exchange rate that appears to have found a high level of resistance, has kept the yield curve under pressure, particularly in the longer tenors.


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