BCB likely on hold till Q4 2016

Brazil's central bank is yet to announce its SELIC rate today, the consensus expects the bank to be on hold in its decision, and continue with the same rates at 14.25%.

GDP growth for the country next year have been expected to be lower in recent weeks, but the price pressures were driving the inflation expectations up for next year.

"In the latest Focus Survey released on 23rd November, economists' expectations for inflation stood at 6.64%, above the BCB's target, while we expect to see 6.45% - within the target range but only just", says Rabobank in a research note. 

The increased lack in the country's labour market, combined with the recession, will determine the pace of inflation expectations moving ahead. In this regards, the BCB is likely to be on hold until Q4 2016.