DI contracts for January 2028 and 2035 fell as markets assessed the first-round election result and lower U.S. Treasury yields.
Brazilian DI interest-rate futures fell again on Tuesday, extending Monday’s move after Senator Flávio Bolsonaro (PL) finished ahead of President Luiz Inácio Lula da Silva (PT) in the first round of the presidential race. Lower U.S. Treasury yields also contributed to the decline, according to the report.
By late afternoon, the January 2028 DI contract stood at 12.61%, down five basis points from its previous settlement of 12.663%. The January 2035 contract was at 12.725%, a seven-basis-point drop from 12.791%. On Monday, longer-dated rates plunged by more than 130 basis points as investors reacted to the first-round result.
Some market participants view Bolsonaro as more likely to prioritise fiscal adjustment, although his plans remain unclear. EPS Investimentos chief strategist Luciano Rostagno described Tuesday’s move as a continuation of Monday’s repricing and said it suggested market confidence in a Bolsonaro victory. He said an implemented fiscal agenda could improve inflation expectations and weaken the dollar.
Market professionals have also said that gains after the first round depend on actual fiscal measures. Gravus Capital CEO Ricardo Trevisan said converting intentions into concrete adjustments would determine whether benefits such as lower rates materialise. He noted that, with gross debt above 80% of GDP, fiscal credibility affects borrowing costs for government, companies and households. The 10-year U.S. Treasury yield was down four basis points at 5.273% at 4:31 p.m.