Brazil economic activity edges up in May
EWZ•Rate-cut expectations remain strong
Recent data showed Brazil created far fewer formal jobs than expected in May, while inflation came in well below forecasts in June, reinforcing market bets that the central bank will deliver another interest rate cut.
Policymakers are scheduled to meet in early August, with markets overwhelmingly pricing in a fourth consecutive 25-basis-point reduction in the benchmark Selic rate, which would bring it to 14.0%.
May activity data beats expectations
BRASILIA, July 17 (Reuters) - Brazil's economic activity grew slightly more than expected in May, central bank data showed on Friday, offering a modest sign of resilience as investors increasingly bet on further interest rate cuts.
- The IBC-Br economic activity index, a leading indicator for gross domestic product (GDP), rose a seasonally adjusted 0.1% in May from the previous month.
- That compared with economists' expectations of flat growth in a Reuters poll.
- The index is compiled using the central bank's estimates for agriculture, industry and services, as well as taxes linked to production.
- Excluding agriculture, the index increased 0.2% in May from the previous month.
- On an unadjusted basis, the IBC-Br rose 1.4% in May on a rolling 12-month basis and was up 0.8% from a year earlier.
