Brazil long bond yields rise as IPCA+ 2040 reaches 7.27%

Brazilian government bond yields climbed across most maturities on Wednesday, September 30, recovering part of the decline seen in the previous session. The increases were concentrated in longer-dated debt. In fixed-rate paper, the Tesouro Prefixado 2032 yield rose from 14.08% to 14.11% per year, and the Prefixado com Juros Semestrais 2037 advanced from 14.02% to 14.07%. The Prefixado 2029 moved against the trend, falling from 13.87% to 13.83%.

Among inflation-linked notes, the Tesouro IPCA+ 2040 recorded the largest increase, rising from 7.21% to 7.27% above the IPCA index. The IPCA+ 2032 increased from IPCA + 7.61% to IPCA + 7.62%, and the IPCA+ 2050 rose from 7.03% to 7.08%. In contrast, the IPCA+ com Juros Semestrais 2045 slipped from 7.21% to 7.20%. Breakeven inflation implied by the 2032 maturities stood at around 6.03% per year.

For retirement-focused notes, the Tesouro RendA+ bonds maturing between 2045 and 2065 paid between IPCA + 6.86% and IPCA + 6.98% per year, with the RendA+ 2065 rising from 6.83% to 6.86%. In floating-rate notes, the Tesouro Selic 2031 remained unchanged at Selic + 0.0778%, while the Tesouro Reserva 2036 tracked the benchmark Selic rate.

Rising domestic rates followed higher sovereign yields abroad. On Tuesday, September 29, United States Treasury yields rose for a sixth straight day, with the 30-year yield surpassing 5.61%, its highest level since June 2002, and the 10-year yield reaching 5.28%, its highest since 2007.