Brazil’s 10-year government bond yield edged higher to 14.60% from a three-week low of 14.57% reached on August 25th, pressured by the National Treasury’s auction of fixed-rate securities. The auction was the main factor driving rates higher and steepening the yield curve, marking the second-largest of the year by financial volume. A total of 31 million securities were offered on August 27th, with a financial volume of more than $24 billion. Meanwhile, labor market data confirmed expectations for another decline in Brazil’s unemployment rate, from 5.4% to 5.3%. The baseline scenario remains one of historically low unemployment, slower formal hiring momentum and resilient income growth, although momentum has weakened at the margin. This combination continues to support economic activity, albeit at a slower pace than in 2025, while keeping services inflation a key concern for monetary policy.