MARKET TALK: Might The Next Brazil Rate Exceed A Half-Point?

Talk of global currency wars is also encouraging some investors to anticipate a larger interest-rate cut in Brazil next week as the real has been attractive in light of the huge gap between Brazil's sky-high interest rates and the rock-bottom ones found in the developed world. "The government's renewed focus on a strong BRL has helped increase the expectations that the central bank will respond with more-aggressive easing as a way to help contain the inflow of foreign capital looking for better interest rates," says Santander Economico. All economists polled by Dow Jones say that another half-point cut is the most likely at its upcoming meeting, but some investors are starting to bet on 3/4-point.