Brazil’s Financial Morning Call for February 3, 2026

Brazil markets February 2026 are off to a strong start as the Ibovespa extends January’s impressive 12.56% gain — the best monthly performance since November 2020. Today, all eyes turn to the Copom meeting minutes at 06:00 BRT, where traders will look for clarity on the timing of interest rate cuts after the central bank held the Selic at 15%.

This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.

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Brazil Markets Recap: Foreign Investors Drive R$23 Billion Rally

\nThe Ibovespa rose 0.79% on Monday to close at 182,793.40 points, building on January’s remarkable 12.56% surge. The Brazilian benchmark briefly touched 186,000 points intraday for the first time in history, fueled by the largest foreign capital inflow since January 2022.
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\nForeign investors poured more than R$23 billion ($4.26 billion) into Brazilian equities through January 28, reflecting a global repositioning away from US assets toward emerging markets with attractive valuations and high real yields. Brazil’s equity market has been among the biggest beneficiaries of this rotation.
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\nMonday’s session saw gains in Vale and the banking sector ahead of Q4 earnings releases this week. Petrobras fell nearly 2% after Brent crude dropped 4.36% to $66.30 per barrel following news that Washington is in direct talks with Iran. Rate-sensitive stocks Direcional and Cury led the gainers on expect
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Copom Minutes: What Brazil Markets Expect Today

\nThe main catalyst for Brazil markets today is the release of the Copom meeting minutes at 06:00 BRT. Last week, the central bank held the Selic rate at 15% but revived forward guidance pointing to rate cuts starting in March.
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\nMarkets are currently pricing in a 50 basis point reduction at the March meeting. The minutes should provide clarity on:
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• The committee’s confidence in the disinflation path

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• Conditions required for the easing cycle to begin

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• Views on fiscal discipline and government spending

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• Assessment of external risks including US monetary policy

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\nThe latest Boletim Focus survey showed economists cutting their 2026 inflation forecast for the fourth consecutive week, from 4.00% to 3.99%. This gradual improvement in inflation expectations supports the case for monetary easing, though fiscal concerns remain a key risk factor for Brazil markets in 2026.
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Commodities: Metals Recover After Historic Friday Rout

\nCommodity markets are stabilizing this morning after Friday’s historic selloff that saw silver plunge nearly 30% — its worst single-day performance since 1980. The rout was triggered by Kevin Warsh’s nomination as Federal Reserve Chair, which sent the US dollar sharply higher and crushed precious metals.
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\nKey commodity moves this morning:
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• Gold: $4,777/oz (+2.5%) — down 15% from last week’s $5,600 peak

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• Silver: $87.10/oz (+10.1%) — short-covering bounce

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• Iron Ore: $107.80/t (+2.2%) — pre-Lunar New Year restocking

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• Copper: $5.50/lb (-5.0%) — down 15% from all-time highs

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• Brent Crude: $66.30/bbl (-4.36%) — Iran talks ease supply fears

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\nFor Brazilian exporters like Vale, the iron ore recovery is encouraging, though the broader base metals weakness warrants monitoring. Petrobras remains under pressure from oil’s decline as geopolitical risk premiums fade.
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US Markets Summary: Wall Street Rallies on Manufacturing Strength

\nUS stocks rose on Monday, providing a supportive backdrop for emerging markets including Brazil. The Dow Jones jumped 1.05% to 49,407.66, while the S&P 500 added 0.54% to close at 6,976.44 — near all-time highs.
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\nKey highlights from the US session:
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• Manufacturing activity expanded at the fastest pace since 2022

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• Apple gained 4.1%, Micron surged 5.5%

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• Transportation stocks hit new all-time highs

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• Nvidia fell 2.9% on OpenAI deal uncertainty

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• Bitcoin dropped below $80,000 for the first time since April

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\nImportant: Friday’s US jobs report has been delayed due to the government shutdown that began over the weekend. This adds uncertainty to dollar direction and could impact Brazil markets through currency volatility.
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Latin America Markets: Regional Outperformance Continues

\nLatin American markets continue to outperform global peers, with five countries now ranking among the world’s ten best-performing equity markets in 2026. The combination of a weaker dollar, strong commodity prices, and reform momentum is driving capital into the region.
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\nRegional highlights — February 2:
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• Argentina (MERVAL): +2.45% to 3,126,292 — Milei reforms attracting flows

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• Chile (IPSA): +36.6% over 3 months — best performing EM globally

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• Colombia: Peso surging on global risk reset

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• Mexico (IPC): -0.26% to 64,141 — holiday on Monday

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\nThe broader context is important for Brazil markets: XP Investimentos raised its year-end Ibovespa target to 190,000 points from 185,000, citing the January foreign inflow surge and valuation re-rating across the region.
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Economic Calendar: Key Events for February 3, 2026

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What Traders Should Watch in Brazil Markets Today

\nHere are the four key themes that will drive Brazil markets on February 3:
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1. Copom Minutes and Rate Cut Timing

\nMarkets are pricing a 50bp cut in March. A more hawkish tone than expected could pressure rate-sensitive stocks like homebuilders and small caps. Conversely, dovish language supporting earlier or larger cuts would likely extend the rally.
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2. Bank Earnings This Week

\nItaú and Santander Brasil report Q4 results on February 4, with Bradesco to follow. Together with Vale and Petrobras, these names account for roughly 50% of the Ibovespa. Expect elevated volatility around the releases.
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3. Commodity Stabilization

\nToday’s bounce in precious metals appears driven by short-covering rather than fresh buying. Monitor whether the recovery sustains or if selling pressure resumes. Iron ore strength is positive for Vale.
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4. US Government Shutdown

\nFriday’s nonfarm payrolls report has been delayed indefinitely. Any resolution news could move the dollar and impact emerging market currencies including the real.
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Technical Analysis: Key Levels for Brazil Markets

\nHere are the critical support and resistance levels traders should monitor:
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\nTechnical indicators show RSI cooling from overbought levels across timeframes, suggesting momentum is moderating while the broader uptrend remains intact. The Ibovespa touched 186,000 intraday last month — watch for a retest of this level if the Copom minutes surprise dovishly.
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Brazil Markets: Corporate News and Headlines

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• XP raises Ibovespa target: Year-end forecast lifted to 190,000 points from 185,000, citing foreign flows and valuation re-rating.

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• Boletim Focus: Economists cut 2026 inflation forecast for the fourth straight week (4.00% → 3.99%).

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• Brazil oil production: Country shatters production record as economic and climate tensions collide.

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• Raízen: Biomassa unit acquires 100% of Sumitomo stake; shares under pressure.

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• Rio politics: Mayor Eduardo Paes abandons City Hall for Governor’s race.

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Bottom Line: Brazil Markets February 2026 Outlook

\nBrazil markets enter February 2026 with strong momentum following the best January in over five years. Foreign investors continue to drive inflows, and the prospect of rate cuts from March is supporting risk appetite.
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\nThe key risk is that Copom strikes a more cautious tone than expected, which could trigger profit-taking after the extended rally. Additionally, the global commodity backdrop remains fragile following Friday’s precious metals rout.
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\nFor now, the path of least resistance appears higher for Brazilian equities, but traders should remain alert to shifts in monetary policy expectations and any deterioration in fiscal sentiment. The 186,000 level on the Ibovespa represents the immediate upside target, with XP’s 190,000 year-end forecast looking increasingly achievable if current conditions persist.
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