Brazil likely continue tightening cycle

The weekly central bank survey shows that Brazil's inflation continues to be under pressure.

The highlight of the latest survey published on Monday shows that markets see inflation at 8.97% by the end of the year from 8.37% a month ago. In what concerns USD-BRL, market participants see this variable at 3.20 by the end of the year (median of the sample) and at 3.40 y the end of 2016. 

According to Commerzbank, "We see faster depreciation for the BRL in the next months that should intensify with the beginning of monetary normalization in the US. Our own forecasts see USD-BRL at 3.40 by year-end".