Copom Day 1 · Vale Q1 After-Market · IPCA-15 Pre-Decision · War Day 59
Copom Day 1: Iran Floats Hormuz Reopening — Microsoft-OpenAI Exclusivity Ends — Gerdau Beats with R$2.96B EBITDA — BoJ Holds 6-3
Today’s Brazil morning call lands on Copom Day 1 with the most consequential 48 hours of 2026 ahead. This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.
Monday delivered three structural shocks. First, Iran — through Pakistani mediators — formally proposed reopening the Strait of Hormuz to the U.S. via Axios reporting, in exchange for ceasefire extension and deferred nuclear talks. Trump scrapped the Witkoff-Kushner Pakistan trip Saturday, calling negotiations a waste of time, and Iranian FM Araghchi flew to Moscow to meet Putin. Brent spiked to $108 intraday before easing to ~$106; WTI peaked at $96.7 then settled near $96. The proposal is the first concrete diplomatic offer in two weeks, but the U.S. response remains the variable.
Second, the Microsoft-OpenAI exclusive cloud partnership formally ENDED. Microsoft loses exclusivity on OpenAI products through 2032; OpenAI can now serve all clouds (AWS, Google), reflecting the $50B Amazon strategic deal struck in February. Microsoft no longer pays revenue share to OpenAI. Microsoft shares unchanged, Alphabet +1.5%, Amazon −0.5%. The S&P 500 still notched a fresh ATH at 7,173.91 (+0.12%), Nasdaq at 24,887.10 (+0.20%), Dow −0.13%. Nvidia +4%, Alphabet +1.8%, Micron +5.6%. The AI trade absorbed the Microsoft news without flinching.
Third, Brazil’s domestic story tightened. The Ibovespa fell 0.61% Monday to 189,578.79 — closing below 190,000 for the first time since the April 8 ceasefire bounce, and 4.57% off its ATH. The MACD histogram deepened to −830.88 (from −565.95 Friday). Critically, the RSI broke below its moving average for the first time since the rally began, confirming a momentum regime shift. The USD/BRL closed at R$4.9795 (−0.57%) — the third straight session below R$5.00, but with the BRL refusing to extend lower. Gerdau Q1 reported R$2.96B EBITDA (+23% YoY, beat), R$1.01B net income (+34%), with North America delivering 75% of consolidated EBITDA — a strong result that should lend support today. The BoJ held overnight at 0.75% in a hawkish 6-3 split, raising core CPI forecast to 2.8% from 1.9% — yen strength signal. Copom convenes today; decision Wednesday. Vale Q1 after market close. War Day 59.
Three Things That Matter
| Yesterday | Iran proposes Hormuz reopening via Pakistani mediators (Axios) — extension of ceasefire, nuclear talks deferred until U.S. blockade lifted. Trump cancelled Witkoff/Kushner Pakistan trip Saturday. Brent spiked to $108 intraday, eased to ~$106. WTI peaked $96.7, closed ~$96. Microsoft-OpenAI exclusive cloud partnership ENDED — OpenAI free to serve any cloud (AWS, Google); Microsoft retains non-exclusive license through 2032; revenue share capped. S&P 500 +0.12% to 7,173.91 (NEW ATH). Nasdaq +0.20% to 24,887.10 (NEW ATH). Dow −0.13% to 49,167.79. Nvidia +4%, Alphabet +1.8%, Micron +5.6%, Apple −1.3%. Ibovespa −0.61% to 189,578.79 (closed below 190K). USD/BRL R$4.9795 (−0.57%). Bitcoin near $77,000 (−1.1%). Gold ~$4,694 |
| Overnight | BoJ HELD at 0.75% in 6-3 split — 3 dissenters proposed hike to 1%. Core CPI fcst raised to 2.8% (from 1.9%); FY26 GDP cut to 0.5% (from 1%). Yen strengthened on hawkish dissent. Japan FinMin Katayama warned of 24-hour FX intervention readiness. Gerdau Q1 reported: R$2.96B EBITDA (+23% YoY, beat), R$1.01B net income (+34%), R$16.72B revenue (slight miss). North America 75% of EBITDA. R$0.18/share dividend. Iranian FM Araghchi met Putin in Moscow. Asia mostly higher: Nikkei +1.38% to record 60,537; Kospi +2.15% to record 6,615. Pakistan said second round of US-Iran talks may proceed by phone |
| Today | COPOM DAY 1 — meeting starts today, decision tomorrow Wed Apr 29 at 18:30 BRT. Selic at 14.75%. Consensus: 25bp cut to 14.50%. Brazil IPCA-15 (07:00 BRT, cons: 1.00% MoM / 4.48% YoY) — final domestic inflation print before decision. Vale Q1 earnings after-market. Mexico Trade Balance (08:00). US S&P/Case-Shiller HPI (09:00). US CB Consumer Confidence (10:00, cons: 89.4 vs prev 91.8). Richmond Fed Mfg (10:00, cons: −4). US 7-Year Note Auction (13:00). ECB Lagarde speaks (13:30). API Crude Stocks (16:30). Chile Rate Decision (18:00, cons: hold 4.50%). Australia CPI Q1 (21:30). War Day 59 |
Where We Left Off MONDAY, APR 27 — SESSION CLOSE
Monday’s session in São Paulo confirmed what yesterday’s Morning Call warned about: with Focus IPCA above the 4.50% ceiling and the MACD histogram accelerating bearish, the path of least resistance was lower. The Ibovespa opened at 190,745, traded as high as 191,339 in early dealings, then sold off through the session to close at 189,578.79 (−0.61%, −1,166.23 points). The intraday low of 189,578 was the close itself — the index ended at session lows, the first such tape since April 8. The MACD histogram deepened to −830.88 from Friday’s −565.95, a 47% acceleration of bearish momentum. The RSI fell to 48.29 and crucially broke below its 14-period moving average at 63.45 — the first such break since the April rally began. That single technical event matters: it formally ends the bullish momentum regime that began with the April 8 ceasefire. The cumulative loss from the 198,657 ATH now stands at 9,078 points (−4.57%) and has erased two-thirds of April’s gains. Petrobras, Itaú and Bradesco led the decline; Sabesp and Eletrobras provided modest support.
In New York, the AI trade kept setting records even as the partnership architecture beneath it shifted. The S&P 500 added 0.12% to 7,173.91 — its 12th record close of April. The Nasdaq Composite gained 0.20% to 24,887.10. The Dow fell 0.13% to 49,167.79, dragged by Apple (−1.3%), McDonald’s (−3.06%) and IBM (−1.62%). Nvidia rose 4%, Alphabet 1.8%, Micron 5.6%, Qualcomm 1%. The Microsoft-OpenAI exclusivity announcement — the most significant change to the AI cloud landscape since 2023 — landed mid-session with Microsoft shares ending unchanged. The market read: structural positive for OpenAI, neutral for Microsoft, modestly positive for Alphabet and Amazon. The VIX eased to 18.71 — relatively low for a market with WTI at $96 and a war in its ninth week.
The geopolitical narrative tilted slightly constructive late Monday. Axios reported — citing a U.S. official and two sources — that Iran had offered through Pakistan to reopen the Strait of Hormuz in exchange for an extended ceasefire, with nuclear talks deferred until the U.S. naval blockade lifts. The proposal arrived as Iranian FM Araghchi traveled to Moscow to meet Putin, and as Pakistan signaled a second round of U.S.-Iran talks might proceed by phone. Brent surged toward $108 on Trump’s Saturday cancellation of the envoy trip, then eased to ~$106 as the proposal news circulated. The market is now pricing a small but non-zero chance of a constructive Hormuz outcome in the next two to three weeks — the first such pricing in 14 days.
Market Snapshot DATA AS OF MON, APR 27 CLOSE
| Indicator | Close / Level | Change |
|---|---|---|
| Ibovespa | 189,578.79 | −0.61% (−4.57% from ATH) |
| USD/BRL | R$4.9795 | −0.57% (3rd day <R$5) |
| S&P 500 | 7,173.91 | +0.12% (NEW ATH) |
| Nasdaq | 24,887.10 | +0.20% (NEW ATH) |
| Dow Jones | 49,167.79 | −0.13% |
| WTI Crude | ~$96.00 | +1.94% (peaked $96.7) |
| Brent Crude | ~$106 | Spiked to $108 intraday |
| Gold | ~$4,694 | −0.3% |
| Bitcoin | $76,949 | −0.55% |
| VIX | 18.71 | −3.11% |
| Gerdau Q1 EBITDA | R$2.96B | +23% YoY (BEAT) |
What to Watch TUESDAY CATALYSTS
Today is the most data-dense single session of the month, before tomorrow’s Copom decision and FOMC start. The 07:00 BRT release of Brazil’s IPCA-15 mid-month inflation print is the dominant domestic data event: consensus is 1.00% MoM and 4.48% YoY (versus 0.44% / 3.90% prior). A print at consensus or above effectively confirms the de-anchored inflation expectations Friday’s Focus Survey already implied — and constrains Copom Wednesday. A surprise downside print (sub-0.90% MoM) would be the first dovish data point in three weeks and could spark a relief rally in rates and equities. Vale’s Q1 earnings after market close are equally critical: with iron ore stable and the BRL strong, expectations are for a solid quarter — but capex guidance and Petrobras-Vale-style commentary on the war’s logistics impact will move the needle.
In the U.S., CB Consumer Confidence at 10:00 EDT is the most-watched data: consensus 89.4 versus prior 91.8 — a sharp drop that aligns with Friday’s Michigan Sentiment record low. Richmond Fed Manufacturing (cons: −4 vs prior 0) and S&P/Case-Shiller HPI (cons: 1.0% YoY vs prior 1.2%) round out the morning. The 7-Year Note Auction at 13:00 EDT tests fixed-income demand at elevated yields — last auction yielded 4.255%. ECB Lagarde speaks at 13:30 BRT, and API Crude Stocks at 16:30 EDT will reveal whether the Hormuz closure is materially affecting U.S. inventories yet.
Chile’s central bank decides at 18:00 BRT — consensus is hold at 4.50% with copper near records and CPI at target. Australia’s Q1 CPI at 21:30 BRT (overnight Tuesday) sets up Wednesday’s Asia open. The Mag 7 earnings parade begins after-market Tuesday: Alphabet, Microsoft (recapping the OpenAI deal), Meta tomorrow; Apple, Amazon Thursday. With the S&P 500 at 7,173.91 on AI-driven euphoria, the Mag 7 results are the bull case’s stress test. The Ibovespa enters the session at 189,578 with bearish technicals, supportive Gerdau earnings, oil at $96 with a Hormuz reopening proposal in play, and an oversold BRL refusing to extend lower. The structure favors a stabilization attempt; the catalyst is IPCA-15.
Ibovespa Setup TECHNICAL LEVELS
Monday: O:190,745.13, H:191,339.93, L:189,578.79, C:189,578.79 (−0.61%, −1,166.23). Closed at the session low. The index breached 190,000 on a closing basis for the first time since April 8 and the first sub-190K close in 13 trading days. MACD histogram at −830.88, deepening from −565.95 Friday — bearish momentum is accelerating, not stabilizing. RSI at 48.29 has now broken below its 14-period MA at 63.45 — a formal momentum regime change. The four-session loss since the 191,378 Thursday high totals 1,800 points (−0.94%); the loss from the 198,657 ATH is 9,078 points (−4.57%). The 187,371 / 187,197 SMA convergence is now the next major support — only ~1.2% below current spot.
Resistance: 190,832 (Friday close gap-fill) → 191,339 (Monday high) → 191,814 → 194,407 → 198,657 (ATH).
Support: 189,578 (Monday close, primary defense) → 187,371 / 187,197 (Kijun-Tenkan / SMA convergence — major support) → 181,875 (lower Bollinger) → 160,038 (200-day).
Copom Watch SELIC AT 14.75% · DECISION TOMORROW 18:30 BRT
The Copom begins its two-day meeting today with a constraint set unique in the cycle. Focus IPCA 2026 sits at 4.80% — formally above the 4.50% tolerance ceiling. WTI is at $96 with Brent at $106 and the Strait of Hormuz still effectively closed. Friday’s Michigan one-year inflation expectations jumped 100bp to 4.8% — telling the BCB that even the U.S. consumer is now pricing the war’s energy shock into long-run expectations. Against that, the BRL has held below R$5.00 for three sessions despite the equity correction, R$68B of YTD foreign inflows are intact, and copper, soft commodities, and the carry trade rate differential argue for currency strength. The Copom’s task: cut without losing the inflation-fighting credibility the cycle was built on.
Consensus remains 25bp to 14.50% — a near-unanimous call. The split is on guidance. Three plausible outcomes: (1) Dovish 25bp — cut to 14.50% with language signaling “continued gradual easing if conditions warrant” and citing BRL strength as offsetting energy pressure. This validates the easing cycle, the Ibovespa recovers toward 192,000-194,000, and 2-year DI rates compress 30-50bp. (2) Hawkish 25bp — cut to 14.50% but with explicit emphasis on “upside inflation risks,” de-anchored expectations, and “data-dependence at every meeting going forward.” This effectively closes the June window and the index drifts toward 187,200 support. (3) Hold at 14.75% — a surprise pause justified by Focus above ceiling and oil at $96. Probability is low but non-trivial given the data; would trigger a 2-3% Ibovespa selloff toward 184,000-186,000 and broader EM stress.
Today’s IPCA-15 print at 07:00 BRT (consensus 1.00% MoM / 4.48% YoY) is the BCB’s last incoming data point before the decision. A print of 0.95% or lower removes one obstacle to dovish guidance. A print of 1.05% or higher — particularly if energy contributions surprise — turns the Copom statement explicitly hawkish. The market is positioned for outcome (1) but not heavily; option pricing on DI futures suggests roughly 60% of risk is already priced for a dovish 25bp, leaving meaningful repricing room in either direction.
Economic Calendar TUESDAY, APR 28
| Time | Event | Impact |
|---|---|---|
| Pre-Market | BoJ Core CPI YoY (01:00, prev: 2.2%). BoJ Press Conference (02:30) — post-decision context after 6-3 hawkish split hold. Spanish Retail Sales YoY (03:00, prev: 2.2%). Spanish Q1 Unemployment (cons: 9.80%). Italian Industrial Sales / PPI (04:00-05:00). ECB Bank Lending Survey (04:00). India Industrial Production (06:30, cons: 4.0%) | HIGH |
| 07:00–08:00 BRT | Brazil IPCA-15 (07:00, cons: 1.00% MoM / 4.48% YoY vs prev 0.44% / 3.90%) — final inflation read before Copom. Mexico Trade Balance (08:00). COPOM Day 1 begins — decision tomorrow Wed Apr 29 at 18:30 BRT | CRITICAL |
| 09:00–10:30 | US House Price Index Feb (09:00, cons: 0.1% MoM). S&P/Case-Shiller HPI 20-City YoY (cons: 1.0% vs prev 1.2%). US CB Consumer Confidence Apr (10:00, cons: 89.4 vs prev 91.8). Richmond Fed Mfg (10:00, cons: −4 vs prev 0). Richmond Services (cons: prev 9). Dallas Fed Services (10:30, prev: 1.3) | HIGH |
| 13:00–16:30 | US 7-Year Note Auction (13:00, prev yield: 4.255%). M2 Money Supply Mar (13:00, prev: 22.65T). ECB President Lagarde Speaks (13:30). API Weekly Crude Oil Stock (16:30, prev: −4.4M) — first major inventory check since Hormuz tightening | MEDIUM |
| After-Mkt & Overnight | Vale Q1 earnings (after Brazil close). Chile Rate Decision (18:00, cons: hold 4.50%). Australia Q1 CPI (21:30 BRT, cons: weighted mean 4.80% YoY vs prev 3.70%) — RBA implications. Mag 7: Alphabet + Microsoft + Meta after-market Tuesday Wednesday | CRITICAL |
Latin America Markets MONDAY CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa (Brazil) | 189,578.79 | −0.61% | 48.29 | Bearish |
| IPC (Mexico) | 67,992.36 | −1.79% | 46.02 | Bearish |
| COLCAP (Colombia) | 2,189.86 | −1.93% | 36.43 | Oversold |
| IPSA (Chile) | 11,130.03 | −0.39% | 55.60 | Neutral |
| MERVAL (Argentina) | 2,866,257 | +0.90% | 48.27 | Neutral |
Monday delivered the broadest LatAm equity selloff in three weeks. Mexico’s IPC slumped 1.79% as the peso weakened on profit-taking and the Trade Balance ahead of Tuesday’s release. Colombia’s COLCAP fell another 1.93% to 2,189.86, with RSI at 36.43 deeply oversold — the index has now broken below its short-term MA cluster and trades 4% off its 2,278 high. Chile’s IPSA was the relative outperformer at −0.39% (RSI 55.60 — closest to neutral), supported by copper near records. Argentina’s MERVAL was the lone gainer at +0.90% to 2,866,257 — defying the regional weakness on continued Milei-era foreign inflows. The structural picture: oil exporters (Brazil, Colombia, Mexico) under MACD bearish pressure simultaneously, while Argentina and Chile (copper, lithium beneficiaries) are stabilizing. As covered in the latest LATAM Pulse, the Copom decision is the single most important regional catalyst this week — a dovish Brazilian outcome would be the relief valve LatAm needs.
Commodities & FX KEY MOVES
Oil traded with extraordinary volatility Monday. Brent spiked to $108 on Trump’s Saturday cancellation of the Pakistan envoy trip, then eased to ~$106 (−$2 from intraday peak) on the Axios report of Iran’s Hormuz proposal. WTI followed: peaked at $96.7, settled near $96 (+1.94%). The IEA characterizes this as the largest energy supply shock on record. With the Strait still effectively closed since February 28 — Bloomberg reported traffic remained near zero Monday morning — and U.S. blockade intact, even a constructive diplomatic process would take weeks to reflect in flows. Goldman maintains a $90 Q4 average forecast. Citi’s $110 upside scenario remains in play if proposals stall.
USD/BRL at R$4.9795 (−0.57%) — the third consecutive close below R$5.00. The chart shows the pair sitting at R$4.9829 in Tuesday early trade with RSI at 37.77 (deeply oversold) and the RSI MA at 32.74. The MACD histogram has flipped marginally positive at +0.0020 from a negative regime — a subtle but important shift suggesting the BRL strength move is mature. Friday’s R$4.9395 print marked a March-2024 multi-year low. The carry trade at 14.75% (or 14.50% post-Copom) and R$68B in YTD inflows provide the structural floor, but with RSI at oversold and MACD turning, the BRL’s room to extend below R$4.95 is narrowing — particularly into a hawkish Copom outcome.
Bitcoin closed at $76,949 (−0.55%) per the Bitstamp tape — O:77,374 H:77,474 L:76,641 C:76,949. RSI 62.31, MA 58.19. MACD histogram +1,899 (positive but moderating from the early-April push). Strategists note BTC remains in a technical bear market, sitting more than 40% below its October peak. Gold at ~$4,694 (−0.3%) holds near its consolidation range despite the war’s persistence — the dollar’s weakness against EM is absorbing some of gold’s traditional safe-haven flow.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| Iran’s formal Hormuz proposal is the first concrete diplomatic offer in two weeks — Through Pakistani mediators, Iran offered to drop the strait closure in exchange for ceasefire extension and deferred nuclear talks. Even if Trump rejects the specific terms, the existence of an offer narrows the tail-risk distribution. Brent retreating from $108 to $106 on the news shows the market repricing.
Gerdau’s Q1 beat (R$2.96B EBITDA, +23% YoY) is the first hard corporate evidence that the war hasn’t crippled Brazilian industrial earnings — North America at 75% of EBITDA insulates against domestic softness. If Vale tonight delivers similarly, the Q1 earnings season provides the fundamental backdrop the Ibovespa needs to defend 187,200 support. The BRL’s third consecutive sub-R$5.00 close with RSI at 37 oversold proves the carry trade is structural, not sentiment-driven — Even with the Ibovespa correcting 4.57% from ATH and oil at $96, the real refused to break back above R$5.00. R$68B YTD inflows + 14.75% rate + weak DXY = a structural BRL floor that survives a hawkish Copom. |
The Ibovespa’s MACD histogram at −830.88 with RSI broken below MA is a formal momentum regime change — This is no longer a routine pullback. The four-session loss has erased two-thirds of April’s gains, the first sub-190K close since April 8 is on the tape, and 187,197 support is just 1.2% away. A break of 187,200 opens 181,875 (lower Bollinger) — a further 3% downside.
If Copom delivers hawkish 25bp or holds at 14.75%, the easing cycle the April rally was built on dies — Focus IPCA above 4.50% ceiling combined with Brent at $106 gives the BCB rational cover for caution. The market has priced ~60% of risk for a dovish 25bp; the ~40% non-dovish probability is unhedged. A hawkish surprise would compress equity multiples and steepen the DI curve aggressively. The U.S. AI euphoria is sustaining historic concentration risk into Mag 7 earnings week — S&P 500 at 7,173 ATH with VIX at 18.71 and concentrated leadership in Nvidia, Alphabet, Microsoft. The Microsoft-OpenAI exclusivity break is the first real architectural disruption to the AI cloud trade. Any disappointment from Alphabet/Microsoft/Meta tomorrow or Apple/Amazon Thursday could trigger a 3-5% correction that LatAm cannot insulate from. |
Positioning BOTTOM LINE
Day 1 of Copom convenes against the most asymmetric setup of the cycle. The Ibovespa enters at 189,578 with the MACD bearish accelerating, RSI broken below MA, and the index 4.57% off its ATH — a textbook correction structure that needs a catalyst to reverse. That catalyst is two-fold: today’s IPCA-15 print at 07:00 BRT and tomorrow’s Copom decision at 18:30 BRT. With Focus at 4.80% above ceiling, the BCB has the rational cover for cautious 25bp guidance — and the market is positioned for that outcome but not heavily. The dovish surprise pays asymmetrically; the hawkish surprise punishes asymmetrically.
Three structural positives entered the session overnight. First, Iran’s formal Hormuz proposal — even if rejected on terms — establishes a diplomatic floor that didn’t exist a week ago and pulled Brent from $108 to $106. Second, Gerdau’s Q1 beat (R$2.96B EBITDA, +23% YoY) provides the first hard evidence that war-era Brazilian industrials can still grow earnings — a template Vale should validate tonight. Third, the BoJ’s 6-3 hawkish hold at 0.75% with raised core CPI (2.8%) reinforces that the global rate cycle is normalizing higher, not lower — which structurally supports the BRL carry trade even at 14.50% Selic.
The structural read: the BRL’s three-day defense of sub-R$5.00 with RSI deeply oversold is the cleanest signal in the tape. Even with the Ibovespa correcting, oil elevated, and a hawkish Focus revision, the carry trade is holding. That’s the floor that will determine how the next 48 hours play out. If Copom delivers a measured dovish 25bp Wednesday, the Ibovespa recovers to 192,000-194,000 and the correction ends. If hawkish, 187,200 support is tested — but the BRL likely holds, limiting the equity damage. Position for IPCA-15 first, Copom second, and remember: the carry trade — proven structural across nine weeks of war and a 4.5% equity correction — remains the core thesis. Today is data day. Tomorrow is decision day. Watch the language.
RT Staff Reporters · This newsletter is for informational purposes only and does not constitute investment advice. Always consult a licensed financial advisor before making investment decisions. Past performance does not guarantee future results.