Brazil: 10-Year Bond Yield Moves Higher.

Brazil's 10-year government bond yield rose above 14.75% in late July from 14.54% earlier in the month, amid the outlook of higher interest rates and the outlook of greater bond supply. Oil, natural gas, soybeans, and power prices rose on the wholesale market as new strikes between Iran and the US tempered hopes that energy supply from the Middle East would restart. The developments supported an outlook that inflation could regain traction and prevent the Brazilian central bank from easing rates in the upcoming quarters, lifting yields domestically. Meanwhile, signals of higher deficit spending from the federal government added to a deteriorating fiscal situation. The latest data showed that the nominal budget deficit widened more than expected to BRL 164 billion. Consistently, government revenues were hampered by fresh tariffs from the United States.