Brazil’s Financial Morning Call for January 20, 2026

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

Today’s Key Themes

\n

\n \t
• São Paulo inflation cooling → IPC-Fipe eased to 0.35% mid-January amid housing deflation (-0.18%) and softer food (0.21%), but transport surged to 1.36% and education to 1.86%, squeezing households and signaling persistent cost pressures.

\n \t

• EU-Mercosur expansion → Deal signed Jan 17 boosts Brazil’s global import access from 8% to 36%, with immediate zero tariffs on 82.7% of EU exports, $48.2B 2024 exports/$47.2B imports, supporting 21.8K jobs per R$1B exported amid fragmentation.

\n \t

• Farm delinquency rise → Rural defaults hit 8.3% in Q3 2025 (up 0.9pp YoY), hardest on 30-39 age group (12.7%), tied to credit stress and regional variations (North 12.4%), potentially tightening agribusiness lending and delaying planting.

\n \t

• Supreme-Congress clash → Tensions escalate over budget amendments transparency, with court halting irregular transfers (e.g., R$7B in 2026 proposals), risking fiscal credibility, local funding disruptions, and market volatility from governance frictions.

\n \t

• Inflation expectations → BCB Focus shows 2026 inflation easing lower, inside target ceiling, but high-for-longer rates persist amid fiscal scrutiny.

\n \t

• Ibovespa stall → Index edges up 0.03% near records but with thin R$12.8B turnover, stretched momentum amid U.S. holiday and iron ore slide.

\n \t

• Currency dip → Real firms to ~R$5.37 as USD slips 0.16% in low liquidity, masking politics like Haddad’s 2026 role talks.

\n \t

• Gold lead → Pushing to new highs on tariff and trade-war fears.

\n \t

• Crypto cool → Bitcoin drops 1.6% to $91K on liquidations and tariff jitters, extending $100K failure.

\n

\nBroader risk: U.S. tariff threats on Europe and Greenland, Fed politics, and EM volatility could amplify FX and equity swings. These effects may be partially offset by Brazil’s rate differential and trade pacts.
\n

Economic Agenda for January 20, 2026

\n

Brazil

\n

\n \t
• 6:25 AM BRT – BCB Focus Market Readout Cons: – Prev: –

\n

\n

Argentina

\n

\n \t
• 2:00 PM ART – Trade Balance (Dec) Cons: 1,372M Prev: 2,498M

\n

\n

United States

\n

\n \t
• 8:15 AM EST – ADP Employment Change Weekly Cons: – Prev: 11.75K

\n \t

• 11:30 AM EST – 3-Month Bill Auction Cons: – Prev: 3.570%

\n \t

• 11:30 AM EST – 52-Week Bill Auction Cons: – Prev: 3.380%

\n

\n

EU

\n

\n \t
• 2:00 AM CET – German PPI (MoM) (Dec) Cons: -0.2% Prev: 0.0%

\n \t

• 2:00 AM CET – German PPI (YoY) (Dec) Cons: -2.4% Prev: -2.3%

\n \t

• 3:00 AM CET – Current Account n.s.a. (Nov) Cons: – Prev: 32.0B

\n

\n

UK

\n

\n \t
• 2:00 AM GMT – Average Earnings ex Bonus (Nov) Cons: 4.5% Prev: 4.6%

\n \t

• 2:00 AM GMT – Average Earnings Index +Bonus (Nov) Cons: 4.6% Prev: 4.8%

\n \t

• 2:00 AM GMT – Claimant Count Change (Dec) Cons: 15.6K Prev: -3.3K

\n

\nImplication: Today’s Brazilian BCB Focus Market Readout offers insights into market expectations for inflation, growth, and rates, potentially affirming resilience amid fiscal scrutiny and oil strength to support the real and equities.
\n
\nUK labor metrics (earnings ~4.5-4.7% cons, claimant change 15.6K cons, unemployment 5.1% cons) gauge wage pressures and jobs momentum, where softer reads could fuel BoE easing bets and lift EM assets like BRL, while stickier figures bolster the dollar.
\n
\nEU German PPI (-0.2% MoM cons) and headline (-2.4% YoY cons) test disinflation progress, with ZEW sentiment (50 cons) and ECOFIN Meetings discussing fiscal coordination—lower inflation could ease ECB pressures, aiding risk mood.
\n
\nU.S. ADP jobs weekly and bill auctions signal labor/liquidity trends, with API oil stocks influencing energy; Argentina trade balance tests export recovery. Overall, U.S. post-holiday liquidity returns, amplifying reactions to these releases amid tariff fears and Fed politics.
\n

Brazil’s Markets on Monday

\nIbovespa +0.03% to 164,849.27 on R$12.8 billion turnover. Thin liquidity from U.S. holiday amplified swings, commodities dragged with iron ore down 2.58% pressuring Vale, while Petrobras firmed modestly; banks and heavyweights (~50% index weight) held near records but momentum stretched.
\n
\nRead more 
\n

Commodity Markets

\n

Palladium

\nPrice: $1,855.00/oz, up 0.82% (as of 04:37).
\nWhat’s happening: It is rising with the broader flight into precious metals.
\n

Platinum

\nPrice: $2,396.50/oz, up 0.76% (as of 04:37).
\nWhat’s happening: It is holding firm as safe-haven demand stays strong.
\n

Gold

\nPrice: $4,734.52/oz, up 1.36% (as of 04:37).
\nWhat’s happening: It is pushing to new highs on tariff and trade-war fears.
\n
\nRead more 
\n

Silver

\nPrice: $95.22/oz, up 0.55% (as of 04:37).
\nWhat’s happening: It is still bid, but it is choppier than gold.
\n

Copper

\nPrice: $5.88/lb, down 0.38% on the day.
\nWhat’s happening: The market is cooling after a record run, led by profit-taking.
\n

Iron ore (62% Fe CFR)

\nPrice: $107.15/ton, shown unchanged, but data is delayed to Jan 16.
\nWhat’s happening: The screen is effectively stale, with no fresh trading update.
\n

Aluminum (LME 3-month)

\nPrice: $3,131.5/ton, down 1.07% (Jan 20 session print).
\nWhat’s happening: It is giving back gains after a very strong early-year surge.
\n

Currency

\nBrazilian Real → Dipped to ~R$5.37 (range R$5.345–R$5.382); supported by softer DXY (99.053) in thin holiday liquidity, masking politics like Haddad-Lula 2026 talks and Focus R$5.50 median; countered tariff anxiety but no panic.
\n
\nRead more 
\n

Companies and Market

\nSão Paulo Inflation Gauge Cools, While Transport And Education Costs Surge → IPC-Fipe to 0.35% mid-Jan amid housing/food relief, but transport 1.36% and education 1.86% squeeze households, masking pressures in mobility/school fees.
\n
\nRead more 
\n
\nBrazil Tops Latin America’s Billionaire Count as Oxfam Warns of a New Oligarchy → 66 billionaires hold $253B, leading region amid 16% global wealth rise, but risks oligarchy via politics/media influence and regressive taxes.
\n
\nRead more 
\n
\nFrom 8% To 36%: The EU Deal That Expands Brazil’s Trade Reach Overnight → Boosts import coverage to 36%, immediate 82.7% tariff-free EU exports, $48.2B 2024 exports/$47.2B imports, 21.8K jobs/R$1B exported; strategic amid fragmentation.
\n
\nRead more 
\n
\nBrazil’s Farm Delinquency Climbs In 2025, Hitting Younger Producers Hardest → 8.3% Q3 defaults (up 0.9pp YoY), 12.7% for ages 30-39, tied to credit stress/regions (North 12.4%); may tighten lending, delay planting.
\n
\nRead more 
\n
\nWhy Brazil’s Supreme Court And Congress Are Heading For A Bigger Clash In 2026 → Over amendments transparency (R$7B 2026 proposals halted), risking fiscal credibility, local disruptions, and volatility from governance tensions.
\n
\nRead more 
\n

U.S. Markets on Monday

\nClosed for Martin Luther King, Jr. Day. Latest close Friday: Choppy with Dow -0.2%, S&P 500 -0.1%, Nasdaq -0.1%; risk appetite cooled on Fed path/leadership uncertainty, trade noise adding premiums.
\n

Regional Peers — Mixed:

\nColombia’s Peso And Stocks Rise As A Softer Dollar Sets The Tone → USD/COP ~3,652.6 firmer on DXY weakness; MSCI COLCAP +1.37% to 2,377.57 record, led ISA/Ecopetrol; pension debate may add dollar demand.
\n
\nRead more 
\n
\nDollar Softness Kept The Peso Firm As Mexico Stocks Hovered Near Records → USD/MXN ~17.57 up 0.27%; S&P/BMV IPC +0.49% to 67,467.82 near peak, led Grupo México/Becle; oversold RSI supports rebounds, Banxico steady at 7.00%.
\n
\nRead more 
\n
\nArgentina’s Peso Holds a Tight Blue Premium as Global Tariff Jitters Hit the Dollar → USD/ARS ~1,434 official, blue ~1,505 (3% premium); S&P Merval -0.69% to 2,912,976; oversold RSI signals pause amid tariff caution.
\n
\nRead more 
\n
\nChile Markets Split: Strong Peso, Tired Stocks, And A Crowded Carry Trade → USD/CLP ~888.75 steady on DXY soft; IPSA slightly lower at 11,143, weighed Entel/Santander; $9.6B net shorts near peak, copper $5.88/lb cushions.
\n
\nRead more 
\n
\nNote: Crypto markets cool after overnight selloff as tariff fears return → Bitcoin -1.6% ~$91,000, Ether -2.4% ~$3,201; $233M long liquidations expose leverage.
\n
\nRead more 

Related coverage: Ibovespa session | dollar-real exchange rate