Darwin Dib´s analysis on the Brazilian FX market (Unibanco´s Economic Focus, on Feb 14th) is unique: it combines deep understanding of trends and policies over the last two or three years with careful consideration of the Brazilian Central Bank´s policy alternatives. Its main point: as long as Brazilian economic indicators remain strong and Fed´s “revealed preferences” allow lower volatility in Treasury Bonds market, attempts to contain the appreciation of the Brazilian currency are destined to be precarious. Add to that the opportunities expected to arise from the Country´s experience on ethanol as a substitute/complement for gasoline and from the growing international demand for commodities… yep, there may be no stopping of the appreciation pressures in 2007... to say absolutely the least!
Fichas de aula, dicas acadêmicas e reflexões sobre economia e finanças para os interessados nos temas tratados por Luiz Maia, Professor Associado na UFRPE.
Forecasting inflation
You see? It’s harder than people think... Wall Street was expecting a 1.9% jump of the PCE - Fed´s favorite inflation measure for quite some time, now - for the 4th quarter, 2006. And they couldn’t be more wrong: 0.8% deflation, the largest in more than 50 years! Preliminary figures, ok... but nonetheless...
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