Market Information Thursday 02 July 2026

Euro zone inflation slowed more than expected to 2.8% in June from 3.2%, below the 3.0% forecast, as food, energy and services prices eased. Core inflation also declined to 2.4% from 2.6%. While still above the European Central Bank’s 2% target, easing price pressures and weaker wage growth support a cautious policy stance. Markets expect the central bank to pause in July but still anticipate a potential rate hike later in the year.

The U.S. dollar’s recent rebound is expected to fade despite growing bullish positioning, as easing oil prices reduce inflation concerns and expectations for Federal Reserve rate hikes. Most foreign exchange strategists still foresee gradual dollar weakness, with the euro projected to rise to $1.17 by end-2026. However, a sizeable minority anticipate near-term dollar strength driven by persistent inflation, elevated yields and potentially more aggressive monetary tightening than other major central banks.

Brazil’s Treasury warned fiscal targets will become unfeasible from 2028 without new measures, as rising mandatory spending continues to outpace cost controls. Despite current targets allowing limited deficits, projections show primary surpluses of only 0.2% to 0.3% of gross domestic product versus goals of up to 1.5%. Funding gaps could reach 136.4 billion reais by 2030. Public debt is expected to peak near 87.9% of gross domestic product in 2029.

The 6M Euribor decreased with 3 basis points to 2.57% compared to previous business day. The 10Y Swap increased with 2 basis points to 2.93% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.