B3 Reopens · S&P 7,230 ATH · Nasdaq 25,114 ATH · ISM Prices 84.6 (4-Year High) · Brent $108 · Iran Talks Resume · BCB Focus Today · Warsh in 11 Days · War Day 65
B3 Reopens to Records, ISM Prices at 84.6, and Iran Negotiations — The Focus Survey Sets the Week
Today’s Brazil morning call marks B3’s return from the Workers’ Day holiday into a radically improved global backdrop — and one deeply uncomfortable inflation datapoint. This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.
The S&P 500 and Nasdaq both extended to fresh all-time highs on Friday — S&P at 7,230.12 (+0.29%), Nasdaq at 25,114.44 (+0.89%) — their sixth consecutive weekly gains, the longest streak since October 2024. Apple rose 3.2% on its earnings beat, and oil fell sharply as Iran reportedly submitted a fresh negotiation proposal through Pakistani mediators. Brent closed at $108.17 (−2.02%), WTI at $101.94 (−2.98%) — the first close below $110 for Brent since April 22. The oil pullback from $126 to $108 in two sessions is the most significant de-escalation signal since the war began.
But the inflation data was ugly. The ISM Manufacturing Prices Paid surged to 84.6 — the highest since April 2022 — up from 78.3, driven by oil and diesel costs from the Middle East conflict. The headline PMI was unchanged at 52.7 (missed 53.0), with employment collapsing to 46.4 from 48.7 — the sharpest drop in four months — even as new orders rose to 54.1. This is the purest manufacturing stagflation print of the war: production slowing, employment crashing, prices exploding. Combined with Thursday’s GDP miss (2.0%) and Core PCE beat (4.3%), the US stagflation narrative is now backed by three consecutive data confirmations. UMich consumer sentiment held at record lows (49.8). The Ibovespa enters Monday at 187,318, having reclaimed the Kijun and held through the holiday weekend. The BRL is at R$4.9576. The BCB Focus survey at 07:25 BRT is today’s most important data release for Brazilian markets — the eighth consecutive weekly IPCA upgrade would push expectations above 5.0% and further compress Copom’s room to cut in June. Today: BCB Focus (07:25), Brazil Mfg PMI (09:00), European PMIs, US Factory Orders (10:00 ET), FOMC Williams speaks (12:50 ET), Fed Loan Officer Survey (14:00 ET). Itaú/Bradesco earnings tomorrow. Warsh takes Fed chair May 15. War Day 65.
Three Things That Matter
| Yesterday | B3 CLOSED (Workers’ Day). Ibovespa unchanged at 187,318. USD/BRL at R$4.9576. S&P 500 +0.29% to 7,230 — new ATH. Nasdaq +0.89% to 25,114 — new ATH. 6th consecutive weekly gain. Dow −0.31% to 49,499. Apple +3.2% on earnings beat. Brent −2.02% to $108.17 — first close below $110 since Apr 22 — Iran submitted fresh proposal via Pakistan. WTI −2.98% to $101.94. ISM Mfg PMI: 52.7 (unchanged, missed 53.0). ISM Prices Paid: 84.6 (from 78.3 — HIGHEST SINCE APR 2022). ISM Employment: 46.4 (from 48.7 — sharpest drop in 4 months). New Orders: 54.1. UMich Consumer Sentiment: 49.8 (record low). S&P 500 Q1 earnings growth tracking 27.1% (highest in 4+ years). Roblox −18.3%. Reddit +13.1%. X-Energy IPO +32% |
| Overnight | Iran-US talks remain alive via Pakistan — no escalation over the weekend. Bitcoin broke above $79K — trading at $79,779 (+1.55%) as of Sunday close, highest since late January. Brent stable near $108 in Sunday futures. Japan closed (Greenery Day). China closed (Labor Day). UK closed (May Day). India Mfg PMI: 54.7 (below 55.9 cons but still expansionary). S&P 500 futures +0.20%. European PMIs due Monday morning. Berkshire Hathaway annual meeting: Buffett era formally ends, Greg Abel takes helm. CFTC data: crude oil net longs at 192.3K, BRL specs at 43.5K (stable), S&P net short −110.1K |
| Today | BCB FOCUS MARKET READOUT (07:25 BRT) — 8th consecutive IPCA upgrade expected; 5.0%+ threshold in play. Brazil S&P Global Manufacturing PMI Apr (09:00, prev: 49.0). European Manufacturing PMIs: Eurozone (cons: 52.2), Germany (51.2), France (52.8), Italy (51.6), Spain (49.5). Sentix Investor Confidence May (cons: −20.9). US Factory Orders Mar (10:00 ET, cons: 0.5%). US Durable Goods ex-Defense/ex-Transport. FOMC Member Williams Speaks (12:50 ET). Fed Senior Loan Officer Survey (14:00 ET). Chile Economic Activity Mar (08:30, prev: −0.3%). Mexico Mfg PMI (11:00). US Total Vehicle Sales (14:00, cons: 16.0M). Tomorrow: Itaú Q1 + Bradesco Q1 + Copom Ata (minutes). Warsh takes Fed chair May 15 (11 days). War Day 65 |
Where We Left Off FRIDAY, MAY 1 — B3 CLOSED · US SESSION
B3 was closed for Workers’ Day on Friday, but the world kept trading — and the results were overwhelmingly positive for the Ibovespa’s Monday reopen. The S&P 500 extended to a fresh record at 7,230.12 (+0.29%), the Nasdaq surged to 25,114.44 (+0.89%) on Apple’s +3.2% post-earnings rally, and both indices logged their sixth consecutive weekly advance. As covered in Friday’s Morning Call, the holiday weekend’s dominant risk was oil headlines — and the outcome was constructive: Iran reportedly submitted a fresh negotiation proposal through Pakistani mediators, driving Brent down 2% to $108.17, its first close below $110 since April 22. WTI fell nearly 3% to $101.94. The oil reversal from $126 (Thursday intraday high) to $108 in two sessions is a $18 move — the sharpest de-escalation in crude since the war began on February 28.
The ISM Manufacturing report was the session’s most important data release — and it delivered the worst possible combination for the inflation narrative. The headline PMI was unchanged at 52.7 (missed the 53.0 consensus), but the Prices Paid index surged to 84.6 from 78.3 — the highest since April 2022 — driven entirely by oil and diesel costs linked to the Middle East conflict. Employment collapsed to 46.4 from 48.7, the sharpest contraction in four months, even as new orders rose to 54.1. This is textbook manufacturing stagflation: rising prices, falling employment, stagnant output. The ISM’s survey chair noted 69% of panelist comments were negative, with 47% mentioning the war. Combined with Thursday’s GDP miss (2.0%) and Core PCE beat (4.3%), the US now has three consecutive stagflation data confirmations. UMich consumer sentiment settled at 49.8 — a record low, though marginally above the 47.6 preliminary reading.
The weekend was quiet on the geopolitical front — no military escalation, no Hormuz incidents, no Trump statements on Iran. Bitcoin broke above $79,000 for the first time since late January, closing at $79,779 on the Bitstamp daily. Berkshire Hathaway held its annual meeting, formally transitioning to Greg Abel’s leadership. S&P 500 futures are up 0.20% in Sunday evening trading, pointing to a flat-to-positive Monday open. The Ibovespa enters the week at 187,318, having reclaimed the Kijun at 187,197 last Thursday. The key question for Monday: does the constructive oil-and-equity backdrop translate into a gap-up toward 189K–190K, or does the Focus survey (if IPCA crosses 5.0%) introduce a new bearish domestic catalyst?
Market Snapshot DATA AS OF FRI, MAY 1 (US) / THU, APR 30 (BRAZIL)
| Indicator | Close / Level | Change |
|---|---|---|
| Ibovespa | 187,317.64 | CLOSED FRI (Thu +1.39%) |
| USD/BRL | R$4.9576 | Sub-R$5.00 (4th week) |
| S&P 500 | 7,230.12 | +0.29% ATH (6th weekly gain) |
| Nasdaq | 25,114.44 | +0.89% ATH (AAPL +3.2%) |
| Dow Jones | 49,499.27 | −0.31% (Comcast −8%) |
| Brent Crude | $108.17 | −2.02% (Iran talks resume) |
| WTI Crude | $101.94 | −2.98% (below $102) |
| Gold | ~$4,619 | −0.55% (rate-hike repricing) |
| Bitcoin | $79,779 | +1.55% (above $79K) |
| ISM Prices Paid | 84.6 | HIGHEST SINCE APR 2022 (+6.3) |
| Selic Rate | 14.50% | Focus today · Ata tomorrow |
What to Watch MONDAY CATALYSTS
The BCB Focus survey at 07:25 BRT is Monday’s most important release. Focus IPCA 2026 has risen for seven consecutive weeks, reaching 4.9% last Monday. An eighth consecutive increase — pushing expectations above 5.0% — would be the first breach of the psychological threshold and would further compress Copom’s room for a June cut. The comunicado explicitly stated that the BCB is cutting while projecting IPCA at 4.6% (above the 4.5% ceiling). If Focus crosses 5.0%, the gap between market expectations and the target ceiling widens to 50bp, making any forward guidance for continued easing politically impossible. Watch also for Focus Selic year-end expectations — currently at 13.50% (XP) to 13.00% (BTG/ASA).
Oil below $110 is the session’s structural tailwind. Brent at $108.17 is $18 below the $126 wartime high from four days ago. Iran’s fresh proposal through Pakistani mediators is the first concrete diplomatic signal in weeks. If Brent stabilizes in the $105–110 range through Monday, the Ibovespa should gap higher toward 189K–190K, reclaiming ground lost during the six-session selloff. The BCB’s reference scenario uses ~$80 Brent — $108 is still $28 above that, but the direction of travel matters more than the level for sentiment.
ISM Prices at 84.6 reinforces the global rate-hike repricing. Traders are pricing 75% ECB hike in June, 50%+ BoE hike. The Fed’s Warsh transition (May 15, 11 days away) adds institutional uncertainty. FOMC Member Williams speaks at 12:50 ET — his comments on the Prices Paid surge and the stagflation combo will be the day’s most market-moving Fed communication. The Fed Loan Officer Survey at 14:00 ET provides the first read on credit conditions since the war’s escalation in late April.
European Manufacturing PMIs this morning set the tone. Eurozone consensus 52.2 (prev 51.6), Germany 51.2, France 52.8. The PMIs were surveyed during the Brent $110–$126 spike period — if they show prices surging (like ISM), the ECB hike probability rises further. Tomorrow is the critical day: Copom ata (minutes), Itaú Q1, Bradesco Q1 — all three release Tuesday. The ata will reveal any dissent and the BCB’s internal oil-price assumptions, making it the week’s single most important event for Brazilian rate pricing.
Ibovespa Setup TECHNICAL LEVELS
Last session (Thursday Apr 30): O:184,758.66, H:187,920.77, L:184,758.66, C:187,317.64 (+1.39%, +2,567.22). The Ibovespa enters Monday unchanged at 187,318, having reclaimed the Kijun at 187,197 and held through the holiday weekend. MACD: main line at 1,993.92, signal at 600.26, histogram at −1,393.66 — still deeply negative, but the histogram’s rate of decline is decelerating and Thursday’s rally should compress it further. RSI at 58.79, signal at 44.99 — the 13.8-point gap between main and signal is narrowing, suggesting the bearish momentum regime is transitioning to neutral. S&P futures (+0.20%) and Brent below $110 point to a gap-up open toward 188K–189K.
Resistance: 187,318 (Thursday close) → 187,921 (Thursday high) → 189,635 (Apr 25 close) → 190,610 → 190,794 → 198,658 (ATH).
Support: 187,197 (Kijun — RECLAIMED) → 187,307 → 184,759 (Thursday low) → 183,794 (cloud base) → 183,263 (March 25 swing low) → 160,790 (200-day SMA).
Copom Watch SELIC AT 14.50% · FOCUS TODAY · ATA TOMORROW
The week’s Copom narrative is concentrated in 48 hours: the Focus survey today and the Copom ata (minutes) tomorrow. The Focus at 07:25 BRT will show whether the IPCA 2026 median has crossed 5.0% — a psychologically and institutionally significant threshold. Seven consecutive weekly increases from 4.2% to 4.9% have been driven almost entirely by the oil shock’s pass-through to energy and transport expectations. If the Focus holds at 4.9% or ticks to 5.0%, the market will interpret it as “priced in” and the Ibovespa gains on relief. If Focus jumps to 5.1%+ — reflecting the late-April Brent spike to $126 — it creates a new hawkish constraint that even oil’s retreat to $108 cannot offset.
The Copom ata releases Tuesday morning and is the week’s single most important event. The comunicado was hawkish-neutral: cut delivered, IPCA raised above ceiling, no June guidance. The ata will reveal: (1) whether any members dissented or pushed for a pause; (2) the BCB’s internal oil-price assumptions; (3) how explicitly the “depth and extent” of the Middle East conflict was discussed as a potential reason to pause. If the ata reveals a pause discussion, the DI curve reprices June as a hold and the front-end backs up 20–30bp. If the ata confirms unanimous commitment to continued (data-dependent) easing, the curve compresses and the Ibovespa extends the recovery toward 190K. Terminal Selic estimates: XP 13.50%, BTG/ASA 13.00%, consensus shifting toward 14.00% if the cycle pauses.
Economic Calendar MONDAY, MAY 4
| Time | Event | Impact |
|---|---|---|
| All Day | HOLIDAYS: Japan (Greenery Day), China (Labor Day), UK (Early May Bank Holiday). Thin Asian/European liquidity | NOTE |
| 03:15–04:00 ET | European Manufacturing PMIs Apr: Spain (03:15, cons: 49.5), Italy (03:45, cons: 51.6), France (03:50, cons: 52.8), Germany (03:55, cons: 51.2), Eurozone (04:00, cons: 52.2 vs prev 51.6). Sentix Investor Confidence May (04:30, cons: −20.9) | HIGH |
| 07:25 BRT | BCB FOCUS MARKET READOUT — IPCA 2026 (prev: 4.9%, 7th consecutive rise). Selic year-end. GDP 2026. USD/BRL year-end | CRITICAL |
| 08:30–09:00 BRT | Chile Economic Activity Mar (cons: — vs prev −0.3%). Brazil S&P Global Manufacturing PMI Apr (09:00, prev: 49.0) | MEDIUM |
| 10:00 ET | US Factory Orders Mar (cons: 0.5% vs prev 0.0%). Durable Goods ex-Defense (cons: −0.3%). Durable Goods ex-Transport (prev: 0.9%) | MEDIUM |
| 11:00–12:50 ET | Mexico Manufacturing PMI (11:00, prev: 48.9). US 3-Month + 6-Month Bill Auctions (11:30). FOMC Member Williams Speaks (12:50) | HIGH |
| 14:00 ET | Fed Senior Loan Officer Survey. US Total Vehicle Sales Apr (cons: 16.0M vs prev 16.3M) | HIGH |
Latin America Markets LAST SESSION (THU APR 30) — ALL REOPEN TODAY
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa (Brazil) | 187,317.64 | +1.39% | 58.79 | Kijun Held |
| IPC (Mexico) | 67,858.09 | +1.13% | 50.76 | Neutral |
| COLCAP (Colombia) | 2,178.00 | +1.54% | 47.85 | Recovering |
| IPSA (Chile) | 10,908.30 | +0.46% | 58.53 | Stable |
| MERVAL (Argentina) | 2,832,851 | −0.21% | 51.24 | Neutral |
All five LatAm indices reopen Monday after the Workers’ Day holiday into a constructive global backdrop: S&P and Nasdaq at records, Brent below $110, Iran talks alive, no weekend escalation. The gap-up setup favors Brazil and Mexico most directly — both carry strong earnings momentum (Itaú/Bradesco tomorrow) and benefit from the oil pullback’s relief to inflation expectations. Colombia’s COLCAP should extend its bounce from oversold conditions with BanRep having held at 11.25%. Chile’s IPSA remains stable above 10,900, with copper holding near recent levels. The MERVAL’s slight underperformance (−0.21%) reflects the country-specific dynamics of the Milei reform cycle rather than regional contagion. As covered in the latest LATAM Pulse, the regional correlation with oil remains the dominant factor — and oil is cooperating for the first time in two weeks.
Commodities & FX KEY MOVES
Oil continued its retreat from the $126 wartime high, with Brent closing Friday at $108.17 (−2.02%) and WTI at $101.94 (−2.98%). The catalyst was Iran’s reported submission of a fresh negotiation proposal through Pakistani mediators — the first concrete diplomatic signal in weeks. Goldman noted global oil consumption in April may have been 3.6 million bpd below February levels, suggesting demand destruction is real at $110+. US crude exports surged to a record above 6 million bpd. The Brent-WTI spread has narrowed from $25 at peak to ~$6, reflecting improving Atlantic Basin supply. For Brazil, every $1 Brent falls below $110 eases the inflation pass-through pressure on the Copom. If Brent stabilizes in the $105–110 range this week, the June cut probability rises meaningfully.
USD/BRL closed Friday at R$4.9576, essentially flat through the holiday. O:4.9568, H:4.9576, L:4.9568, C:4.9576. RSI at 37.23 (signal: 34.55) — still deeply oversold in favor of the dollar. The BRL has now held below R$5.00 for over four weeks — the longest sustained sub-5.00 stretch since September 2022. The carry trade’s structural integrity is proven beyond any reasonable doubt: the Ibovespa corrected 7% from ATH, oil hit $126, the Copom raised IPCA above ceiling, and the dollar never broke R$5.02. The CFTC data showed BRL spec longs at 43.5K contracts — stable, suggesting no positioning unwind. Monday’s Focus survey is the BRL’s first test of the week: if IPCA crosses 5.0%, watch for a brief R$5.00 test before the carry trade reasserts.
Bitcoin broke above $79,000 over the weekend — O:78,563, H:80,617, L:78,282, C:79,779 (+1.55%). RSI at 64.97 (signal: 61.25) — both lines above 60, the most bullish configuration since mid-January. The MACD histogram has turned positive at +7. BTC is benefiting from the broad risk-on rotation: S&P at records, oil falling, dollar weakening on GDP miss. The $80K level is the next major resistance — a close above $80K would confirm the breakout from the $72K–$78K range that held for three weeks. Gold pulled back to ~$4,619 (−0.55%) as the rate-hike repricing (ECB, BoE) continued to pressure non-yielding assets. Gold is caught between war-premium support and hawkish-rate headwinds.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| Oil’s reversal from $126 to $108 is the most constructive development since the war began. The $18 pullback in two sessions, combined with Iran’s fresh proposal through Pakistan, suggests the supply shock may be peaking. If Brent stabilizes in $105–110, every macro variable improves: inflation pass-through eases, Copom’s June cut becomes viable, the BRL strengthens further, and the Ibovespa’s fair value resets higher. The Kijun at 187,197 is reclaimed and held.
S&P and Nasdaq at all-time records with 27% Q1 earnings growth. The US equity market’s sixth consecutive weekly gain provides the macro risk-on backdrop that supports EM flows. Q1 earnings at 27.1% growth (highest in 4+ years) demonstrate the US economy is absorbing the oil shock without a corporate profit recession. The earnings quality supports continued flows into EM carry trades. The BRL below R$4.96 entering May is the structural floor. Four weeks below R$5.00. CFTC spec longs stable at 43.5K. The carry trade is proven, the inflow base intact. Even if Focus crosses 5.0%, the 14.50% Selic provides the highest real rate in EM. The BRL’s refusal to crack during the worst week of the war validates the structural thesis. |
ISM Prices at 84.6 is the highest since April 2022 — and it confirms a global stagflation regime. GDP at 2.0%, Core PCE at 4.3%, ISM Prices at 84.6, ISM Employment at 46.4 — this is textbook manufacturing stagflation. The global rate cycle has shifted decisively hawkish: 75% ECB hike June, 50%+ BoE hike, and the Fed done cutting. Warsh takes over in 11 days with a hawkish mandate. This structural headwind for EM doesn’t go away because oil dropped $18.
The Focus survey could cross 5.0% and create a new domestic constraint. Seven consecutive weekly IPCA increases have pushed expectations to 4.9%. The BCB is already cutting while projecting above-ceiling inflation at 4.6%. If Focus breaks 5.0%, the gap to the 3.00% target becomes 200bp. The market will price June as a hold, and the DI curve reprices higher across the board. The Copom ata tomorrow will show whether the BCB internally discussed pausing. The oil pullback may be temporary. Iran’s “fresh proposal” is unconfirmed, through intermediaries, and Trump has rejected previous offers. The Strait of Hormuz remains closed. Goldman’s demand-destruction estimate of 3.6M bpd is crisis-level. The UAE left OPEC four days ago. Any escalation headline reverses the $108 level instantly toward $115–120. The market is pricing hope, not resolution. |
Positioning BOTTOM LINE
B3 reopens Monday into the best external backdrop since mid-April. The S&P and Nasdaq are at all-time highs, Brent has pulled back $18 from $126 to $108 on Iran negotiation signals, no military escalation occurred over the holiday weekend, and Bitcoin broke above $79K. The Ibovespa at 187,318 — with the Kijun reclaimed and the six-session losing streak broken — is positioned for a gap-up toward 189K–190K if the Focus survey cooperates and oil holds below $110.
The domestic risk is concentrated in 48 hours. The Focus survey at 07:25 BRT today and the Copom ata tomorrow morning are the two releases that determine whether the Ibovespa’s correction from 198,658 to 184,750 was a one-time adjustment or the start of a repricing of the entire rate cycle. If Focus holds at 4.9% and the ata confirms unanimous data-dependent easing, the index extends to 190K+ by Wednesday. If Focus crosses 5.0% and the ata reveals a pause discussion, the DI curve reprices higher and the index stalls at 187K–188K despite the global tailwinds. The ISM Prices surge to 84.6 is the medium-term headwind no one can ignore — it confirms the global rate cycle has shifted hawkish, with Warsh taking the Fed chair in 11 days.
Bias: Constructive for Monday, with the Focus survey as the binary gate. The external setup (S&P records, oil at $108, BRL below R$4.96) supports a gap-up toward 189K. The Focus survey determines whether the gap holds. If IPCA stays at 4.9% or ticks to 5.0%: the market rallies on relief. If it jumps to 5.1%+: the Copom constraint tightens and the rally stalls. Watch Focus at 07:25 BRT, then Williams at 12:50 ET, then position for tomorrow’s ata + Itaú/Bradesco. This is May’s opening week — and it will set the tone for the six weeks until the June Copom.