Brazil Morning Call for Wednesday, April 22, 2026

Where We Left Off TUESDAY, APR 21 + OVERNIGHT

Tuesday’s U.S. session was a roller-coaster. The Dow opened +400 points on extension hopes, then reversed sharply when reports emerged that Vance had canceled his trip to Islamabad due to Tehran’s “lack of commitment” per the New York Times and Axios. The S&P 500 fell 0.63% to 7,064.01 — erasing a week of accumulation above 7,100. The Nasdaq shed 0.59% to 24,259.96. The Dow lost 293 points to 49,149.38. Apple was the heaviest weight on the S&P, dropping 2.5% after Tim Cook announced he would step down as CEO in September. Oil climbed ~5% as the Strait remained closed and Citigroup warned that $110 oil was possible if the blockade persisted another month.

Then, less than ten minutes after the close, Trump changed everything. He extended the ceasefire indefinitely, saying it was “warranted” to give Iran time to submit a proposal. The extension removes the cliff risk that had been building for two weeks but introduces a new dynamic: an open-ended ceasefire with no talks scheduled, no diplomatic momentum, and Iran calling negotiations a “waste of time.” The blockade continues. The Strait remains closed. The nuclear terms are unresolved. Futures rallied on the headline — S&P +0.52%, Nasdaq +0.68% — but the underlying picture is a ceasefire in name only, suspended in an ambiguous middle ground between peace and escalation.

Retail sales provided the session’s positive anchor: headline +1.4% MoM (matching consensus), with growth relatively stable ex-gasoline — confirming the consumer remained resilient through the first full month of the war. As covered in Monday’s Morning Call, the Ibovespa last traded at 196,132 before the Tiradentes holiday. The index reopens today having missed the Tuesday selloff, the Vance cancellation drama, and the after-hours ceasefire extension. The gap from Monday’s close to today’s open encapsulates three narrative shifts in 36 hours: talks stalling → ceasefire extended → Iran rejecting talks entirely.

Market Snapshot DATA AS OF TUE, APR 21 CLOSE + OVERNIGHT

What to Watch WEDNESDAY CATALYSTS

The Ibovespa‘s reopen is the morning’s primary event for Brazil. The index last traded at 196,132 on Monday. It must now absorb: (1) Tuesday’s U.S. selloff (S&P −0.63%), (2) the after-hours ceasefire extension, (3) the Vance cancellation and Iran’s “waste of time” rhetoric, and (4) the overnight futures rally. The net signal is modestly positive — the ceasefire extension removes cliff risk, but the Strait remains closed and talks are stalled. Expect a flat-to-slightly-positive open as the market prices the mixed signals.

EIA Crude Oil Inventories at 10:30 ET (cons: −1.0M) is the week’s key energy data point — the draw pace under continued Strait closure determines whether $90 oil is sustainable or if the market is tightening further. EU Consumer Confidence at 10:00 (cons: −17.0) measures European sentiment under the blockade and elevated energy costs. The 20-Year Bond Auction at 13:00 tests fixed-income demand with yields elevated and war uncertainty unresolved.

ECB Lagarde at 13:30 is the central bank event of the day. Her post-extension commentary — particularly on how the indefinite ceasefire changes the ECB’s energy-price assumptions — will set European rate expectations. BRL FX Flows at 13:30 BRT will show whether capital continued flowing into Brazil through the Tiradentes holiday. South Korea Q1 GDP overnight (cons: +0.9% QoQ / +2.7% YoY) provides the next Asian growth datapoint after China’s 5.0% beat last week.

Ibovespa Setup TECHNICAL LEVELS

The Ibovespa chart shows Monday’s close repeated (B3 was closed Tuesday): O:195,734, H:196,724, L:195,282, C:196,132 (+0.20%). RSI at 65.53 (MA: 65.17) — balanced, bullish. MACD histogram at 3,885 (MACD: 3,330.71, signal: 554.33). The index enters the reopen with a constructive setup: RSI has fully reset from the 73+ overbought peak, the consolidation band of 195,000-197,000 is well-established, and the ceasefire extension removes the tail risk of an immediate collapse.

Resistance: 196,132 (last close) → 196,415 → 198,657 (ATH) → 200,000 (psychological).

Support: 195,540 → 193,808 → 190,503 / 190,215 → 187,197 → 186,825 → 178,026 (lower Bollinger) → 159,020 (200-day).

Copom Watch SELIC AT 14.75% · NEXT MEETING: APR 28-29

The ceasefire extension is constructive for the BCB — it removes the immediate risk of a ceasefire-lapse oil spike during the pre-decision period. The indefinite nature means the Copom can assess the April 28 meeting without the shadow of an imminent expiration. However, the Strait remaining closed and oil at ~$91 (up from Friday’s $82.59 low) tempers any aggressive dovish shift. The BRL at R$4.98 — now below R$5.00 for a seventh trading day — remains the strongest signal of structural capital inflow and imported-inflation compression.

The base case for April 28 remains: hold at 14.75% with forward guidance acknowledging “improved external conditions” (BRL appreciation, oil decline from peaks) while maintaining “vigilance” on the Strait status and nuclear negotiations. If a deal framework emerges before April 28, the BCB could strengthen the dovish signal toward a June cut. If Iran continues refusing talks, the BCB defaults to cautious patience. The key variable is no longer the ceasefire clock — it’s the Strait itself. Until tankers flow freely, the oil premium persists, and the BCB’s hands remain partially tied.

Economic Calendar WEDNESDAY, APR 22

Latin America Markets TUESDAY CLOSE / CHART DATA

Tuesday saw broad regional weakness as the ceasefire uncertainty hit LatAm markets. Chile’s IPSA dropped 1.90% to 11,128 with RSI falling sharply from 64.60 to 56.43 — the copper index is now back in neutral territory after its overbought surge. Mexico’s IPC fell 1.82% to 68,809 — the sharpest single-day decline in the region — as peso-sensitive stocks reacted to the Vance cancellation and renewed geopolitical risk. Colombia’s COLCAP slipped 0.21% to 2,282. Argentina’s MERVAL was the lone gainer at +0.29% to 2,940,100, insulated from global oil dynamics by its domestic peso dynamics. The Ibovespa’s absence on Tuesday means it missed the worst of the regional selloff. Today’s reopen occurs into a more positive tape: the ceasefire extension + U.S. futures up 0.5% should offset the Tuesday LatAm weakness. As covered in the latest LATAM Pulse, the indefinite ceasefire shifts the narrative from countdown to endurance — a new phase that favors carry trades over momentum trades.

Commodities & FX KEY MOVES

Oil rose ~5% Tuesday to ~$91 as the Strait remained closed and ceasefire uncertainty peaked. The extension removes the immediate risk of strike resumption but doesn’t change the physical supply picture — the Strait is blocked, the blockade continues, and only 3 ships crossed on Monday. Citigroup’s warning of $110 oil if the Strait remains closed for another month sets the upside risk. Today’s EIA data (10:30) will show the draw pace — a large draw (above −2.0M) would confirm supply tightening.

USD/BRL at R$4.9820 from the chart (O:4.9820, H:4.9820, L:4.9820, C:4.9820, 0.00%). RSI at 33.62 (MA: 32.78) — still deeply oversold but the RSI and MA are converging, suggesting the downward momentum is exhausting. MACD at −0.0087 (signal: −0.0561, MACD: −0.0648). The real has now traded below R$5.00 for seven sessions. Today’s BRL FX Flows data (13:30) will show whether capital inflows accelerated through the holiday period.

Bitcoin surged to $77,967 (chart: O:76,346, H:78,446, L:76,154, C:77,967, +2.12%). RSI at 64.90 (MA: 61.09) — healthy momentum breaking above $77K for the first time. The ceasefire extension removes tail risk across all asset classes, providing the risk-on backdrop crypto needs. Next target: $80,000.

Risk Map BULL vs BEAR

Positioning BOTTOM LINE

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