Brazilian portfolio inflows near post-COVID highs
Brazilian portfolio inflows are nearing post-COVID highs ahead of the Selic decision, driven by strong demand for equities and government bonds.
The inflows are supported by renewed interest in terms of trade, strong equity demand, and continued purchases of Brazilian government bonds.
Despite cautious FX conviction due to low volumes and neutral currency positioning, the broader inflow cycle appears to have peaked in April, with the financial account likely to stabilize rather than re-accelerate.