Brazil Morning Call for Monday, April 27, 2026

Where We Left Off FRIDAY, APR 25 — SESSION CLOSE

Friday’s session encapsulated the two-speed global market. In New York, the AI trade reached escape velocity. Intel surged 23.6% — its best single day since 1987 — after crushing Q1 expectations with $13.6B revenue and $0.29 EPS (vs $0.01 estimate). CEO Lip-Bu Tan highlighted that AI workloads actually favor CPUs over GPUs at scale in agentic applications, creating a paradigm shift. AMD rocketed 13.9%, Arm +14.7%, Qualcomm +10%. Nvidia crossed the $5 trillion market cap threshold. The SOX semiconductor index posted its 18th consecutive gain — possibly the longest on record. The S&P 500 closed at a fresh ATH of 7,165.08 (+0.80%), the Nasdaq at 24,837 (+1.63%). X-Energy’s IPO raised $1 billion — the largest nuclear offering ever — and surged 32%. For the week, the S&P posted its best performance since November.

Michigan Consumer Sentiment confirmed the consumer distress: the final April reading came in at 49.8, slightly above the 47.6 preliminary but still a record low. One-year inflation expectations surged to 4.8% — up a full percentage point from March’s 3.8% — the sharpest monthly jump since the 2022 cycle. As BMO’s Hartman noted: “if the shock to energy prices turns out to be more persistent, then we’re likely to see some upward pressure on core prices.” The VIX remained elevated near 20 despite ATHs — an unusual divergence that signals institutional hedging against the geopolitical risk even as equities set records.

In São Paulo, the Ibovespa continued its correction, falling 0.33% to 190,745 — touching 189,963 intraday, the first test below 190,000 since April 8. The MACD histogram deepened to −565.95, confirming the bearish momentum. But the critical development was the BRL: it reversed sharply from Thursday’s R$5.0245 overshoot back to R$4.9793 (−0.90%), decisively rejecting the R$5.00 level from above. As yesterday’s Morning Call flagged, the R$5.00 break was structural — and the market proved it by refusing to sustain above it even with oil elevated and the Ibovespa falling. The Focus Survey was the week’s domestic bombshell: IPCA 2026 raised to 4.80% (above the 4.50% ceiling), Selic end-year to 13.00% (implying only 175bp of cuts). The market is now pricing a much more cautious BCB than the April rally had assumed.

Market Snapshot DATA AS OF FRI, APR 25 CLOSE

What to Watch MONDAY CATALYSTS

The Copom meeting begins tomorrow (April 28) and concludes Wednesday (April 29) — the pre-decision setup is the session’s dominant theme. Today’s Focus Readout at 07:25 BRT will confirm whether the hawkish IPCA 4.80% revision has hardened or softened over the weekend. Gerdau Q1 earnings today provide the first major corporate read into the war’s impact on Brazilian steel/commodity producers — a beat could stabilize the Ibovespa’s correction; a miss accelerates it toward the 187,197 SMA support.

The BoJ decision overnight (cons: hold at 0.75%) and Chile’s rate decision today (cons: hold at 4.50%) provide the global central bank backdrop. GfK German Consumer Climate at 03:00 (cons: −30.2) measures European consumer despair under the blockade. Dallas Fed Manufacturing at 10:30 is the last regional factory read before the FOMC blackout period. US 2-Year and 5-Year Note Auctions at 13:00 test fixed-income demand with yields elevated.

The week ahead is dominated by: Copom (Tue-Wed), Vale Q1 (Tue), Suzano Q1 (Wed), and in the U.S. — Alphabet, Microsoft, Meta, Apple, Amazon all report this week alongside FOMC. This is the most information-dense week of 2026 for Brazilian markets. The Ibovespa at 190,745 enters it 3.98% off its ATH with a bearish MACD, a hawkish Focus revision, and the carry trade still intact at R$4.98. The Copom’s guidance determines the next direction.

Ibovespa Setup TECHNICAL LEVELS

Friday: O:191,378, H:191,390, L:189,963, C:190,745 (−0.33%). MACD histogram at −565.95 — the bearish crossover is accelerating. RSI estimated near 62-63 (moderating from 64.86). The index tested sub-190K for the first time since April 8. The correction from 198,657 (−3.98%) has given back half of April’s gains. The three-session loss since reopening from Tiradentes totals 5,387 points (−2.75%).

Resistance: 190,745 (Friday close) → 191,378 (Thursday close) → 192,889 → 196,132 → 198,657 (ATH).

Support: 189,963 (Friday intraday low / 190K test) → 187,298 / 187,197 (Kijun-Tenkan convergence — major support) → 180,804 (lower Bollinger) → 159,531 (200-day).

Copom Watch SELIC AT 14.75% · MEETING STARTS TOMORROW

The Copom enters its most constrained meeting since the war began. The Focus Survey raised IPCA 2026 to 4.80% — above the 4.50% tolerance ceiling — which means inflation expectations have formally de-anchored from the target. The Selic end-year revision to 13.00% (from 12.50%) implies the market now expects only 175bp of easing through year-end, far less than the 225-250bp priced during the ceasefire euphoria two weeks ago. Oil at ~$97 WTI with the Strait still closed and no talks scheduled adds hawkish pressure.

Consensus expects a 25bp cut to 14.50% — but the guidance language is everything. Three scenarios: (1) Dovish 25bp — cut to 14.50% with forward guidance signaling continued gradual easing, citing BRL strength as inflation offset. This arrests the correction and the Ibovespa recovers toward 193,000-195,000. (2) Hawkish 25bp — cut to 14.50% but with language emphasizing “upside inflation risks,” de-anchoring concerns, and geopolitical uncertainty. This confirms the correction and the index tests 187,197 support. (3) Hold at 14.75% — a surprise hawkish pause citing Focus above ceiling, oil above $95, and Strait uncertainty. This sends the Ibovespa toward 185,000-187,000 and triggers a broader EM selloff.

The BRL at R$4.98 remains the BCB’s strongest ally. The dollar’s inability to sustain above R$5.00 even with oil elevated and the index correcting proves the carry trade is structural, not sentiment-driven. R$68 billion in foreign inflows YTD, a weak DXY, and the 14.75% rate differential provide the BRL floor. The Copom can cut 25bp and still maintain the carry trade’s attractiveness — the question is whether the forward guidance opens or closes the June window.

Economic Calendar MONDAY, APR 27

Latin America Markets FRIDAY CLOSE

The LatAm correction deepened across the board last week. The Ibovespa posted its second consecutive losing week, now 3.98% off its ATH. Colombia’s COLCAP has been the worst regional performer as oil-sector uncertainty weighs on the petro-economy. Argentina’s MERVAL continues sliding below 3 million. The week ahead brings the Copom as the defining catalyst: a dovish cut arrests the LatAm correction; a hawkish hold or guidance sends it deeper. As covered in the latest LATAM Pulse, the week’s earnings barrage (Gerdau, Vale, Suzano in Brazil; Mag 7 in the U.S.) provides the fundamental backdrop the region needs to stabilize.

Commodities & FX KEY MOVES

Oil remained elevated near $97 WTI / $100 Brent — the Strait closure persists and no talks are scheduled. The ceasefire is indefinite but the blockade is the market’s binding constraint. Citigroup’s $110 scenario remains the upside risk if the standoff extends through May. Energy stocks are the only sector insulated from the broader LatAm correction.

USD/BRL at R$4.9793 — back below R$5.00 after Friday’s 0.90% reversal. The dollar’s failure to sustain above R$5.00 is the week’s most important FX signal: the carry trade at 14.75%, the R$68B in YTD foreign inflows, and the weak DXY are structural forces that dominate the daily noise. The R$5.00 level is confirmed as strong resistance.

Gold and Bitcoin remain in risk-on positioning. BTC near $78K, gold near $4,700-4,900. The VIX at ~20 with the S&P at ATHs reflects the unusual cocktail of institutional confidence in AI earnings + hedging against war risk — a duality that defines the current market regime.

Risk Map BULL vs BEAR

Positioning BOTTOM LINE

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