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The week was marked by the real's appreciation against the dollar, driven primarily by strong foreign inflows into domestic assets, most notably the Brazilian stock market, which reached record levels and saw significant capital investment. This trend was supported by the interest rate differential, which keeps the real attractive. Even so, the exchange rate experienced occasional corrections and increased volatility, reflecting caution regarding recent inflation data in Brazil and employment and price indicators in the United States, which influence expectations for the Fed's next moves. Overall, the exchange rate remained relatively resilient with a bias in favor of the real, though it remains sensitive to the external environment and financial flow dynamics.

The yield curve showed signs of settling throughout the week, with future rates retreating and the curve flattening, reflecting the consolidation of expectations for the start of the Selic rate-cutting cycle in March and the perception that monetary policy remains sufficiently restrictive. DI rates fell following signals from the Central Bank that were perceived as more dovish, and in light of a more controlled inflation environment, reinforcing the pricing of gradual easing throughout 2026. The yield curve reflects this environment precisely.


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