Brazil’s 10-year government bond yield fell to 14.1% in late September as falling oil prices halted a sharp sell-off in global bonds. Lower oil prices tempered inflation concerns, pausing the broader bond-market sell-off, amid expectations of progress in diplomatic efforts between Iran and the US. Meanwhile, domestic factors put upward pressure on yields, as Brazil’s mid-month headline inflation rose to 4.47% year over year in September from 4.24% previously, exceeding the 4.30% market consensus. Persistent inflationary pressures could reduce prospects for the continuation of the Selic easing cycle. The BCB cut its policy rate by 25 bps to 13.75% at its September meeting and left its next steps open, while Copom’s minutes were more hawkish than expected. A recent election poll also showed President Lula maintaining a numerical lead over Flávio Bolsonaro in a potential second-round runoff.