Long interest rates rise with the market sensitive to the consequences of Lula’s victory
The DI for January 2035 closed up 10 basis points, with a maximum of 15.385%, while the 10-year Treasury fell, according to InfoMoney and Reuters.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 3 MIN
Brazilian long interest rates closed higher on Thursday, 29th, in the opposite direction of United States Treasury bonds. According to InfoMoney, based on information from Reuters, the market remains sensitive to Lula's victory in the presidential election, and the DI for January 2035 ended the day at 15.23%, an increase of 10 basis points compared to 15.13% the day before.
The pressure was greater in the early afternoon. The rate reached 15.385% at 2:13 pm, which represents an increase of 26 basis points compared to the previous close. The DI for January 2028 closed at 14.355%, a drop of 5 basis points compared to 14.405% in the previous session. The difference between the two ends shows that the curve did not move uniformly, and the coverage does not detail which developments affected each maturity.
In the United States, GDP in the third quarter grew 3.4%, above the projection of 3.2%, and unemployment benefit claims totaled 194 thousand in the week, below the estimate of 199 thousand. Consumer spending rose 0.5% in September, and core PCE, an inflation indicator tracked by the Federal Reserve, rose 0.3%. At 11:35 a.m., the 10-year Treasury was down 7 basis points at 4.978%.
On the fiscal front, the Treasury recorded a primary surplus of R$4.839 billion in September, compared to a deficit of R$14.379 billion in the same month of 2025, according to InfoMoney. DPFe totaled R$345.41 billion, down 0.82% in the month.
On the political scene, Flávio Bolsonaro (PL), defeated in the presidential election, arrived in the United States on Wednesday, 28. According to Reuters, he is being investigated by the STF for money laundering and currency evasion. The Minister of the General Secretariat, Guilherme Boulos, criticized the former candidate on social media, and parties from his base recognized Lula's election.
A sign of a different nature came from online searches. According to Gazeta do Povo, cited by Revista Oeste, searches for “how to live in Paraguay” rose 1,700% in the 48 hours after Lula's victory, confirmed on Sunday, the 25th, according to data from Google Trends. It is a mood indicator, not a market measure.
What changes for the investor
For those who invest in interest, the dollar and the stock market, the movement suggests that the market started to demand more premium to carry long-term Brazilian debt, while the American reference fell. When the long-term rate rises, fixed-rate bonds with distant maturities tend to lose price, and assets sensitive to the cost of money tend to react together. The September surplus and the fall in the DPFe are data that the liberal camp reads as a sign of fiscal responsibility, but the market's reading depends on the sequence of numbers and political developments, and the calculation does not allow us to say which of them weighed more. The coverage also does not include dollar or stock exchange quotes, so these effects cannot be measured with the available data.
Automatically translated from Portuguese.
