The yield on the Brazilian government’s zero-coupon bond due January 2010 was little changed at 14.32 percent, according to a report on Bloomberg.

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Brazil’s interest-rate future yields rose after Banco Itau Holding Financeira SA, the country’s second-biggest non-government bank, boosted its forecast for central bank interest-rate increases.

Central bankers will lift the benchmark overnight rate to 13.75 percent by year-end, Itau said in a report. That estimate is 1 percentage point more than Itau’s earlier forecast and half a point more than the median estimate in a central bank survey of about 100 analysts. Policy makers raised the benchmark rate a half-point to 11.75 percent last month, the first increase in three years, to curb inflation.

“A lot of people are realizing they have to adjust inflation and interest-rate forecasts because price indicators have been so bad,” said Reginaldo Galhardo, foreign exchange manager at Treviso Corretora de Cambio in Sao Paulo.

The yield on Brazil’s interest-rate futures contract for July delivery rose 3 basis points, or 0.03 percentage point, to 11.94 percent. Central bankers are next scheduled to meet to set the overnight rate target on June 3-4.

“Brazil is ideally placed to cash in on the secular commodities boom,” says Merryn Somerset Webb in Money Week. However, she warns that “Brazil will not be immune to a likely relapse in global markets amid fears over the American and global economies – note that the Bovespa index is highly cyclical, with the energy and materials sectors comprising 60% of the index.”

For investors keen to get in on high-yielding Brazilian government bonds, Gary Scott says: “You can borrow US dollars to make multi currency investments from Jyske Bank at rates a bit above and below 4.5% depending on the amount borrowed.

“You can also buy Brazilian bonds that yield around 11%. For example, earlier this month Jyske Bank offered these two Brazilian government bonds: 1) Brazil 12.5% maturing 2016 yield 10.9%, 2) Brazil 12.5% maturing 2022 yield 11.0%.”