By Bruno Federowski SAO PAULO, March 10 (Reuters) – Yields on Brazilian interest rate futures fell sharply on Friday as slower-than-expected inflation data fueled bets that the central bank will increase the magnitude of interest rate cuts next month.
Brazil’s official inflation index rose at its tamest pace since 2010 in the 12 months through February, below expectations of all 24 economists polled by Reuters.
Rate future yields indicated a 60 percent probability that Brazil’s central bank would cut rates by 100 basis points at its monetary policy meeting in April, traders said, with a 40 percent chance of a 75 bps cut.
The central bank has said the size of the rate cut will hinge on inflation expectations and economic data.
The bank cut the benchmark Selic overnight lending rate by 75 bps each in January and February….