PREVIEW-Brazil Jan inflation seen rising 0.7 pct

* WHAT: Brazil’s January IPCA consumer price index

* WHEN: Friday, Feb. 5 at 9 a.m. (1100 GMT)

* REUTERS FORECAST: Median 0.7 percent m/m vs 0.37 percent
in December. Reuters surveyed 31 analysts, and the range was
0.6 percent to 0.76 percent.

FACTORS TO WATCH: Higher prices for food, fuel and bus
fares should push Brazil’s benchmark IPCA consumer price index
(BRCPI=ECI: ) in January to its highest level since mid-2008,
analysts polled by Reuters said.

Because prices will likely rise for one-time reasons,
analysts said, an uptick in the January IPCA will probably not
change views that inflation will end the year within the
government’s target of 4.5 percent, plus or minus 2 percentage

Pressures will likely cool somewhat in February, although
at that point a bump in education costs will come into play.

MARKET IMPACT: As Brazil’s economy has recovered,
expectations for an increase in the benchmark Selic rate have
been mounting. Because central bank policymakers use the
inflation target as a guide in setting rates, faster inflation
could pressure the central bank to raise the Selic from its
current 8.75 percent.

Brazil statistics agency Web site for IPCA data:

All Brazil economic data: (ECONALLBR: )

Today’s data: (ECONBR: )

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(Reporting by Vanessa Stelzer; writing by Luciana Lopez;
editing by Jeffrey Benkoe)

PREVIEW-Brazil Jan inflation seen rising 0.7 pct