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Brazilian government bonds may become an “oasis” for some investors, CNBC analysts said, in particular, if global trade tensions are germ.
The bond market of the largest economy of Latin America is more due to individual factors such as fiscal policy and the prospect of inflation rather than global sentiment, said Victor Excellence, Director of Investment Team debt in Abrdn.
Brazil’s 10-year yields are currently 15,267%, which notes more than 40% jump compared to a year ago, LSEG data showed.
“Brazil offers one of the highest real indicators of all state bond markets,” the public said.
Its yield is much higher than other new market counterparts. For example, the yield of a 10-year government bond of Chile ranges from about 5.939%, and the 10-year state bond of Mexico is about 9.487%.
The cocktail mixture of sticky inflation and uncertainty against Brazil’s financial viewing is the main drivers for the country’s high yields, especially in recent months, according to Watchers Market CNBC.
“Over the last five years, Brazil has been at the bottom of the Latin American League table, slightly ahead of Chile and Colombia,” said Gustav Mediras, Head of the Ashmore Group Research Department, investment management firm. Medeiros added that Uruguay and Mexico He has offered the best overall profit for the last five years.
Brazil, however, now seems ready to overcome its regional peers.
“From year to year (Brazil) is the best local market because the bonds are addressed from 16% to P. 14.6%, and Brazilian reality was estimated from 6.2 to 5.8 to the dollar,” Mediras said.
A unique bond market
The Brazilian bond market is quite unique, and price actions prevail with local quick money, Zvabo Abrdn said.
“It contributes to the high risk and big market for bonds and currency movements,” he added.
“From this individual character, the Central Bank of Brazilian monetary policy can and deviates from the cycles of the fast economy and even its regional peers,” the League said.
From Luis Inazio Lula to Silva returned Prior to the Brazilian presidency, in January 2023, the country’s economy moved on a difficult set of problems and opportunities, such as a high inflation level that inherited from the previous administration.
Loule proceeded to significant expenses that raised questions about sustainability The country’s state debt. Brazil’s state debt as a percentage of gross domestic product (GDP) now stands on 76.1%.
Adding to their individual criticism, observers about the market said CNBC that they consider Brazil regarding the world’s trade rift, given their moderate trade ties with the US
Brazilian President Luis Intyy Lula to Silva at the Mercasur summit.
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The threat of protectionist trade policy by the United States has negatively affected the mood for many new market assets, but Brazil is unlikely to be the main goal in the US President Donald Trump’s trade war, according to Noah’s wise, senior head of the Global Investments portfolio in the team plus fixed income.
Brazilian assets have still been recovered in 2025, and the currency has increased more than 4% against green circulation since the beginning of the year. The Brazilian stock market also made progress, and IboveSpa increased by 12% in this regard, according to LSEG.
The wise stated that in recent months he began adding Brazilian bonds to his portfolio after “significant results”, after earlier reduced the distributions to Brazilian bonds more than 50% in 2024, when the fiscal situation in the country deteriorated.
As the market spotlight appeals to tariffs and geopolitics, the high transfer of Brazilian assets and a relatively low chances of getting into the US trade policy make them attractive in the near future, said Nin Song, senior Markets Market Market.
“Oasis” for some investors?
The Brazilian bond market proves “very uncolored” for all other bond markets, said George Efestopulos, Fidelity International portfolio.
“Brazilian local currency bonds may well become an” oasis “for investors based in Brazil, which should not worry about FX risks,” Efestopulos said.
Local investors can get high nominal yields, which significantly inflation of the eclipse, but also competitive profitability, said efstathopoulos CNBC. However, for foreign investors, the currency risk is real, especially given the great depreciation last year, the portfolio manager added.
“We believe that the rewards compensate for more than the proper risk,” said ZSOLT PAPP, investment specialist JPMorgan Asset Management in the markets.
“Having accessed the Brazilian government market through actively managed funds, it offers investors to diversify the return sources and active risk management,” the PAP said.
