Update: Brazil to receive shipments
Last week read some disturbing news: #China has halted shipments of essential #Sinovac#vaccine components to #Brazil.
Acknowledging the horrible human cost, as a #coffee analyst I also need to look at impact on #coffeeprices.
This news will be evaluated by #FX traders against the #Bullish#BRL / coffee news that #BCB was looking to raise rates to curb #inflation. At last meeting in early May, BCB raised rates on higher end of what was expected and signaled they would continue raising rates at next meeting in June.
Now all that BRL Bullishness has been thrown into jeopardy by the delayed shipments of the vaccine components. Apparently this is due to "diplomatic ill will", ie President Xi is irked by President Bolsonaro's rhetoric on China.
Over the weekend Brazilian authorities announced that vaccine production has been halted until the shipments resume. This will signal to markets that Brazilian #economy will not recover quickly #bearishh BRL) and it will also signal to the BCB to beware raising rates.
It is likely that this blows over in a day or two, but could add some bearish headwind to the #coffeemarket.
