Yields At Record Lows

With Brazil's high-yielding real-denominated instruments likely to remain very attractive as sovereign yields in developed states continue to fall, we believe that additional international investors will be drawn into the Brazilian market, likely prompting yields to fall still lower. While this is likely to ease debt-servicing costs for the time being, we caution that a prolonging of the current spate of debt issuance could see investor wariness about Brazil's rising public debt burden pick up steam, potentially presaging a rise in domestic risk premiums over the medium term.

To read the full article, please choose one of the following options: