Brazil Activity Coincident Tracker

The BofA Brazil Activity Coincident Tracker (ACT) dipped to -15pts in May, signaling a return to negative momentum despite continued support from government-subsidized auto sales. Contractionary monetary policy remains a significant drag on economic activity.

Key Takeaways

• 1.The BofA Activity Coincident Tracker for Brazil fell into negative territory at -15pts in May, down from +14pts in April.
• 2.Auto sales remain the primary positive driver due to government stimulus, while money supply acts as the largest drag.
• 3.Business sentiment has deteriorated, partly due to uncertainties stemming from the Middle East conflict's impact on the Brazilian economy.

Table of Contents

• Coincident tracker returns to negative values in May
• Stimulus measures keep the economy from decelerating
• Middle east conflict continues to weigh over business sentiment
• Auto sales continue to support the tracker
• Money supply: contractionary stance to continue
• BofA Activity Coincident Tracker is a useful tool
• A note on backtesting
• Disclosures

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