Brazil: prices drop 0.40% in August, more than expected

WHAT HAPPENED

Consumer prices in Brazil fell 0.40% in the first half of August, more than the 0.30% expected and after rising 0.06% in July. Annual inflation dropped to 4.24%.

WHY IT MATTERS

Electricity and gas fell 1.41%, transportation 1.00%, and food 0.57%: several everyday expenses cost less than the previous month. With inflation cooling, the central bank has more room to reduce its rate and lower credit costs for homes, cards, and businesses.

AND FOR YOUR PORTFOLIO

For an individual, relief first appears in bills, gasoline, and groceries. For investments linked to Brazil, lower inflation may favor bonds and stocks if it increases the expectation of rate cuts; the market had already risen 1.55% before the figure.