Brazilian DI futures closed sharply higher on Monday, with rates rising more than 15 basis points across several maturities.
The move in the Brazilian rates market mirrored a broader global shift as investors reacted to mounting evidence that central banks may need to keep policy tighter for longer.
The volatility in Brazilian rates came as traders for the first time in the current cycle began pricing in a Federal Reserve rate hike as soon as December.
This shift in expectations follows a series of unexpectedly high inflation readings that have dented the case for imminent easing in the United States.
The repricing of US policy expectations is rippling through emerging markets, where investors are reassessing the duration of high borrowing costs.
The move in DI futures suggests that local market participants are adjusting their outlooks in line with the hardening global rate environment.