An Overview from Turim
The slowdown in activity in China and the Eurozone, the prospect of further interest rate hikes in the United States, and the impending start of an interest rate cutting cycle in Brazil were highlights of Turim’s June Economic Report.
Global economic activity is decelerating, especially in the Eurozone and China, reinforcing the downward trend in commodity prices. However, the risk of crop losses due to El Niño may elevate agricultural prices in the near future.
In the United States, economic data has been stronger than expected, leading the Federal Reserve to adopt a more hawkish stance in combating inflation. Although the rate was held steady at the last meeting, the committee implicitly signaled (through its economic projections) that it foresees two additional rate hikes by the end of the year.
The monetary policy committee of the Central Bank of Brazil has revised its estimate of the natural rate of interest upward – the real rate that neither stimulates nor contracts aggregate demand and inflation. Despite this, in the face of a disinflation process and improved expectations, the committee stated that it may initiate a cautious easing process as early as the next meeting.
Chart on left – Activity: China and Euro Zone expand negative surprises
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Turim
The pioneer of the family office industry in Brazil, with offices in Rio de Janeiro, São Paulo and London.