1. Leading with the bad: Sadly, Oscar Neimeyer the designer of Brasilia, the UN Building in NY, and many other buildings around the world died at the ripe age of 104 last night from respiratory complications. A couple of interesting facts: he had smoked most of his life and kept working until the bitter end. Hands down, my favorite modernist architect.
2. Sharing this morning's headlines: FGTS, which provides mortgage loans through Caixa Economica Federal, will be raising the eligibility limits for loans from R$500 to $750 thousand. This is kind of like HUD loans, but interest rates are actually reduced. This is projected to create R$ 700 million in revenue for the industry from pent-up demand in the new price range.
3. The total civil construction packet announced on Tuesday is estimated at R$3.3 billion. The biggest change will be Social Security contributions that the construction industry must pay into. That will drop from 20% to 2% for the foreseeable future. Caixa Economica Federal will also be allotted an additional R$2 billion. The other two points are a bit beyond me, but it does look like one set of taxes will be reduced from 6% to 4%.
4. Notes from the Banco Central meeting indicate that rates will remain at 7.5% for the foreseeable future.
5. Local shares are currently up 3%. The BRL/USD dropped from 2.10 to 2.08.
Sold 15% stake this morning at $4.61. Holding my core.
I'm anticipating a sideways drift for the next several days to a week before the next leg up. Maybe a 5% correction. The local shares hit some horizontal resistance which should tamp things down for a bit.