The yield on the 10-year Brazilian government bond yield fell below 14%, reaching a three-week low as investors increasingly priced in policy easing, progress on trade negotiations, and falling US Treasury yields. Domestically, the BCB held the rate at a two-decade high of 15% after seven straight hikes, signaling a pause to assess the effects of prior tightening. At the same time, mid-year inflation moderated and industrial output began to soften, reducing the urgency for further rate increases. On the external front, Brazil and the US are actively working to finalize a trade agreement that could avert the looming 50% tariff on Brazilian exports. Globally, declining US yields, driven by weak labor and services data, and fading trade war risks have added to the downward pressure on Brazilian yields. The nearly flat yield curve reflects expectations of rate cuts ahead, backed by firmer fiscal dynamics and trade prospects, though concerns over Brazil’s deficit and credit outlook persist.