Brazil DI Futures Drop Across Most Maturities

Brazilian DI interest rate futures fell across almost all maturities on 10 September. The contract for January 2029 dropped 5 basis points to end at 13.810%, down from 13.625% in the prior close. The long-term January 2036 contract dropped 11 basis points to 14.120%, compared to 14.230% on Wednesday 9 September. The very short-term January 2027 contract was the lone exception, rising 1 basis point to 13.595% from 13.580%.

The local bond market moved in the opposite direction of US Treasuries. Rising oil prices and lower-than-expected Treasury buybacks lifted US yields. Around 18:00 Brasília time, the 2-year US Treasury yield stood at 4.586%, up from 4.427% at the previous adjustment. The 10-year Treasury yield rose to 4.961% from 4.84%.

The domestic rate move followed an AtlasIntel and Bloomberg poll showing a technical tie in a potential presidential runoff. The survey placed Flávio Bolsonaro at 46.4% and President Luiz Inácio Lula da Silva at 46.2%, eliminating Lula's prior 4.5 percentage point lead and leaving a 0.4 point numerical gap within a 1 percentage point margin of error. Undecided and blank votes fell from 10.3% to 7.4%. Gabriel Magno, head of investment allocation and partner at AW Capital, noted that the market is pricing in rising expectations of a Bolsonaro victory, supported by prediction markets.

Investors also monitored institutional friction at the Federal Supreme Court and international geopolitical developments. Iran-aligned Houthi forces took control of the Yemeni port of Mocha, increasing risks in the Red Sea, while tanker traffic in the Strait of Hormuz remained restricted.