Brazilian real yields drop as September IPCA-15 hits 0.70%

Brazilian real interest rates fell across inflation-linked government bonds on Friday, September 25, 2026, after mid-month consumer inflation exceeded forecasts. The IPCA-15 index rose 0.70% in September, surpassing the 0.53% expected by the market. Over 12 months, the index accumulated an increase of 4.47%, with a year-to-date gain of 3.82%. The housing group drove the print with an advance of 2.07%.

The higher-than-expected print increased demand for inflation protection in the Tesouro Direto program, lifting paper prices and pulling yields down. The Tesouro IPCA+ 2040 yield dropped from IPCA + 7.31% to IPCA + 7.27% per year. The IPCA+ with Semiannual Interest 2045 eased from 7.35% to 7.31%, while the IPCA+ 2032 reached IPCA + 7.65% and the IPCA+ 2050 reached IPCA + 7.14%.

In fixed-rate bonds, movements diverged as the market pared expectations for rapid cuts to the benchmark Selic rate, which stands at 13.75% per year. The short-term Tesouro Prefixado 2029 yield rose from 13.83% to 13.91% per year. Further along the curve, the Prefixado with Semiannual Interest 2037 fell from 14.16% to 14.11%, and the Prefixado 2032 held near 14.13%. Breakeven inflation on the 2032 maturity increased from 6% to around 6.02% per year.

Daily mark-to-market valuations reflected the yield moves. An investment of BRL 10,000 made on Thursday in the IPCA+ 2040 reached BRL 10,060 on Friday, a gain of BRL 60. The same amount in the IPCA+ 2050 stood at BRL 10,052.75, and in the IPCA+ 2032 at BRL 10,024.83. Conversely, an allocation of BRL 10,000 in the Prefixado 2029 fell to BRL 9,989.44, representing a loss of BRL 10.56. These valuations apply only to early sales and exclude taxes and fees.