IGP-10 rises 1.47% in September, above expectations

In brief

51% in August.

Wholesale prices led the rise, with soybeans, meal and iron ore up.

29%.

Verified fact · material
The IGP-10 rose 1.47% in September after a 0.51% deflation in August, above the 1.25% median projected in a Reuters survey, according to FGV Ibre data released on September 16.
Upside surprise after a month of deflation.
Sources[01][02]
Verified fact · material
The IPA-10, which weighs 60% of the index, rose 1.90% after falling 0.69%; the IPC-10 rose 0.44% and the INCC-10 0.50%.
Pressure is concentrated at the wholesale level.
Sources[01][03]
Verified fact · material
Over 12 months the IGP-10 accumulates a 3.29% rise and 2.97% in the year.
The accumulated figure is still low, but the trend has reversed.
Sources[01][02]
Verified fact · material
Raw materials rose 3.91%, with soybeans up 7.50%, soybean meal 9.59% and iron ore 2.26%; residential electricity rose 7% with the end of the Itaipu bonus.
Agricultural commodities and iron ore explain the turn.
Sources[01][02]
Context
Economist Matheus Dias of FGV Ibre attributed part of the move in agricultural products to climate uncertainty with a strengthening El Niño.
Links the rise to the climate risk of the next harvest.
Sources[02]

Transmission to assets

The September IGP-M tends to accelerate, pressuring rent and indexed contract adjustments.

For the yield curve, the wholesale rise is one more argument for the Copom not to speed up cuts.

Fundos imobiliáriospositive

Rents indexed to the IGP-M tend to rise.

Rental income grows in nominal terms.

What would change the view: Depends on the IGP-M confirming the acceleration.

macro40% confidence

Juros futuros (DI)negative

Wholesale cost pressure reinforces Copom caution.

Intermediate tenors rise at the margin.

What would change the view: If pass through to the IPCA is limited, the effect is small.

rates40% confidence

Direction is an explanatory hypothesis, not a forecast or recommendation.

Next signals

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