In brief
The 10-year Treasury rose above 5%, the highest since 2007, with markets pricing more Fed hikes.
86%.
What we know
05Verified fact
According to InfoMoney, citing Bloomberg, the 10-year Treasury reached 5.13% and the 30-year about 5.4%; the US Treasury expanded buybacks and plans a second operation on September 24 of up to US$ 6 billion in 20- to 30-year bonds.
Shows the US Treasury reaction.
Sources[01]
Transmission to assets
Market read-through
With Treasuries above 5%, the rate differential that supported the real shrinks and the currency reacts more to the Fed cycle than to the Copom; the long end of the DI curve tends to follow, making further Selic cuts in November harder.
Dollar-earning exporters gain, while retailers and leveraged companies lose.
Portfolio impact
03US rates above 5% shrink the differential that supports the real.
The real becomes more sensitive to the Fed cycle.
What would change the view: Treasuries staying above 5%.
The long end follows the global rise in rates.
Less room for Selic cuts.
What would change the view: Fed confirming further hikes.
A higher cost of capital lowers equity present values.
Exporters offset part of the decline.
What would change the view: Foreign outflows persisting.
Direction is an explanatory hypothesis, not a forecast or recommendation.
Next signals
What to watch
- August PCE and Fed officials remarks
- US Treasury auctions and long-bond buybacks
- Central bank line auctions and the DI curve
Limits of the reporting
What remains uncertain
- The 10-year Treasury closing level varies across sources (5.10% in Bloomberg Línea and 5.13% in InfoMoney).
- The dollar gain appears as 1.28% in Exame and 1.37% in Bloomberg Línea.