Brazil’s Financial Morning Call for Monday, May 18, 2026
S&P −1.2% · Ibovespa Intraday 175K · BRL R$5.05 · Brent $110 · Michigan Sentiment Record Low 48.2 · No Fed Cuts 2026 Priced · Trump: Iran Running Out of Time · Nvidia Earnings This Week · War Day 79
Key Facts
— The S&P 500 fell 1.24% to 7,408.50, the Dow dropped 1.07% back below 50,000 to 49,526, and the Nasdaq declined roughly 1.5% as investors took profits in technology after the week’s record-setting surge, according to Trading Economics and FRED data. Brent crude surged back to $110.47 (+1.11%) after President Trump warned that Tehran is “running out of time” to reach a deal, per Trading Economics. The University of Michigan Consumer Sentiment index crashed to 48.2 in the preliminary May reading — a new record low, down 3.2% from April’s prior record and 7.7% below a year ago, per CNBC citing the University of Michigan survey. The Ibovespa fell 0.61% to 177,283.83, with an intraday low of 175,417.25 — the deepest point of the entire 2026 correction, marking a 23,241-point (11.7%) decline from the 198,658 ATH, per B3 data.
— The BRL weakened further to R$5.0549, its highest dollar close since early April, per ICE data. Traders have now fully priced out any Federal Reserve rate cuts for 2026, per Trading Economics — a structural shift that compresses the Selic carry differential and undermines the BRL’s primary support mechanism. Iranian media reports indicated negotiations with the US remain “far apart,” per Trading Economics. Nvidia lost 2% on Friday and reports earnings later this week — the single most anticipated corporate event of May.
Brent at $110, Michigan at a Record Low, and No Fed Cuts in 2026 — the Macro Backdrop Has Shifted
Three developments on Friday structurally changed the market’s positioning framework. First, Brent crude surged back to $110.47 as investors grew increasingly concerned about the impact of the prolonged Iran conflict on energy prices and inflation, per Trading Economics. The oil rebound from $100 to $110 in a week erases the deal-hope discount that had driven the May 6-8 rally. Second, the University of Michigan Consumer Sentiment index posted a 48.2 preliminary reading, down 3.2% from April’s prior record swoon and off 7.7% from a year ago, per CNBC — the first concrete evidence that the oil shock is destroying consumer confidence. Third, traders fully ruled out any Federal Reserve rate cuts this year, per Trading Economics — a structural repricing that eliminates the primary catalyst for EM carry inflows. JPMorgan economists warned clients they “expect to see increasing signs of demand destruction as energy product consumers adjust to rising prices”.
For Brazil, the no-cuts-in-2026 repricing is consequential. The 14.50% Selic carry trade was built on the assumption that the Fed would cut 2-3 times in 2026, maintaining a ~900bp differential. With the Fed now priced for zero cuts and a 30% chance of hikes by December (per CME FedWatch from earlier this week), the differential narrows if the Copom continues cutting. This creates a dilemma: cut further and risk BRL weakness (already at R$5.05), or pause and risk equity weakness from tighter domestic rates. The Copom’s June 17-18 meeting is 30 days away, and the macro inputs have deteriorated significantly since the ata’s “net dovish” signal.
Market Snapshot AS OF FRI, MAY 15 CLOSE
| Indicator | Close / Level | Change |
|---|---|---|
| Ibovespa | 177,283.83 | −0.61% (low 175,417 · B3) |
| USD/BRL | R$5.0549 | Above R$5.05 (ICE) |
| S&P 500 | 7,408.50 | −1.24% (FRED) |
| Brent Crude | $110.47 | +1.11% (back to $110) |
| Michigan Sentiment | 48.2 | NEW RECORD LOW (CNBC) |
| Bitcoin | $76,711 | −0.91% (below $77K) |
Live Market IntelligenceBrazil Morning Call — Live Board
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Brazil Morning Call — Live Board
-0.02%
185,147.15
-0.02%
65,163.64
-0.42%
11,315.26
-1.14%
3,049,121
-0.29%
2,544.56
+0.40%
59,978.22
-0.31%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 185,147.15 | -0.02% | +21.85% | 185,188.13 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| EUR/BRL | 5.95 | +1.01% | -5.83% | 5.89 | 5.98 | 5.94 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| BRENT | 88.88 | -0.03% | +34.42% | 88.91 | 90.07 | 88.12 | 29,713 |
| WTI | 83.11 | -0.11% | +31.57% | 83.20 | 84.35 | 82.40 | 166,848 |
| IRON ORE | 161.91 | — | +58.10% | 161.91 | 161.91 | 1 | |
| GOLD | 4,461 | +1.78% | +33.20% | 4,383 | 4,503 | 4,421 | 139,824 |
| SILVER | 65.59 | +1.26% | +73.05% | 64.77 | 66.98 | 64.81 | 46,406 |
| LITHIUM | 75.20 | +1.47% | +62.95% | 74.11 | 75.80 | 75.08 | 89,275 |
| SOY | 1,184 | +3.20% | +17.05% | 1,148 | 1,199 | 1,168 | 163,179 |
| CORN | 480.50 | +10.02% | +29.34% | 436.75 | 480.75 | 459.50 | 341,248 |
| WHEAT | 655.00 | +3.93% | +29.70% | 630.25 | 657.75 | 631.50 | 128,793 |
| COFFEE | 317.25 | -5.51% | +0.67% | 335.75 | 321.20 | 313.55 | 21,747 |
| SUGAR | 16.43 | -1.79% | -3.01% | 16.73 | 17.11 | 16.22 | 171,992 |
| ORANGE JUICE | 138.55 | -0.47% | -45.38% | 139.20 | 141.05 | 137.50 | 703 |
| COTTON | 85.03 | +2.33% | +26.78% | 83.09 | 82.90 | 81.96 | 16,546 |
| BEEF | 223.60 | -3.93% | -5.18% | 232.75 | 226.40 | 223.00 | 16,126 |
| CATTLE | 339.10 | -3.16% | -1.82% | 350.17 | 345.50 | 338.60 | 10,164 |
| COCOA | 5,719 | +3.18% | -34.96% | 5,543 | 5,779 | 5,574 | 26,773 |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| KLABIN | 17.69 | +0.80% | -2.95% | 17.55 | 17.74 | 17.48 | 2,057,400 |
| SLCE3 | 13.34 | +0.30% | -12.25% | 13.30 | 13.42 | 13.20 | 1,454,200 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
| LREN3 | 11.87 | -1.33% | -28.65% | 12.03 | 12.17 | 11.83 | 9,683,300 |
Ibovespa Touched 175,417 Intraday — the Deepest Point of the 2026 Correction
Friday: O:178,340.52, H:178,340.52, L:175,417.25, C:177,283.83 (−0.61%, −1,082.03), per B3 data. Open = High for the third time in the correction — the persistent bearish session structure. The intraday low at 175,417 marks an 11.7% decline from the ATH and the deepest print since late February. MACD: −1,407.01/−1,421.86/−2,828.87 — the histogram at −2,829 is a new cycle extreme, confirming the bearish momentum is still accelerating. RSI at 40.09, signal at 32.72 — the signal at 32.72 is approaching the 30 oversold threshold for the first time in the correction.
Resistance: 177,284 (Fri close) → 178,366 (Thu close) → 180,342 → 181,864 → 187,197 (Kijun).
Support: 175,417 (Fri intraday low) → 174,984 (next chart level) → 163,172 (200-day SMA).
Copom Watch SELIC 14.50% · NEXT: JUNE 17-18 (30 DAYS)
The June cut is now the central debate. Since the ata’s “net dovish” signal on May 5, every macro input has deteriorated: US CPI 3.8%, PPI 6.0%, 30Y above 5%, Fed cuts priced out for 2026, BRL above R$5.05, Brent back at $110, Focus IPCA at 5.02% (9th rise), and Michigan Sentiment at a record low confirming demand destruction. The Focus survey at 07:25 BRT today determines whether expectations rise for a 10th consecutive week or stabilize. If Focus hits 5.1%+, the June cut probability drops below 30%. If it holds at 5.0-5.02%, the Copom retains room. Terminal Selic estimates: Genial at 13.25% (increasingly outlier), consensus shifting to 14.00-14.25%.
Economic Calendar MONDAY, MAY 18
| Time | Event | Impact |
|---|---|---|
| 07:00–07:25 BRT | Brazil IGP-10 May (07:00, prev: 2.9%). BCB Focus Survey (07:25) — IPCA 2026 prev: 5.02%. 10th consecutive rise? | CRITICAL |
| 08:00–08:30 ET | Brazil IBC-Br Economic Activity Mar (08:00, prev: +0.60%). Chile GDP Q1 (08:30, prev: +1.6% YoY) | HIGH |
| 10:00–16:00 ET | US NAHB Housing Index May (10:00, cons: 34). US TIC Capital Flows Mar (16:00, prev: +$58.6B). Colombia + Canada closed (holidays) | MEDIUM |
Latin America Markets FRIDAY CLOSE
| Index | Close | Chg | RSI |
|---|---|---|---|
| Ibovespa | 177,284 | −0.61% | 40.09 |
| IPC Mexico | 67,977 | −1.78% | 50.88 |
| MERVAL | 2,707,869 | −1.44% | 44.22 |
| IPSA Chile | 10,421 | −0.58% | 44.73 |
| COLCAP | 2,101 | −0.98% | 36.08 |
| BTC/USD | $76,711 | −0.91% | 58.86 |
Friday was a universal LatAm red day. All five indices fell, with Mexico’s IPC leading losses at −1.78% — its sharpest session since the war’s early weeks. The Ibovespa, MERVAL, IPSA, and COLCAP all declined between 0.58% and 1.44%. The regional breadth is unambiguously bearish with every index’s RSI signal below 45. Colombia’s COLCAP at 36.08 and IPSA Chile at 44.73 are approaching oversold territory. BTC fell below $77K for the first time since late April, per TradingView — the risk-off rotation hit every asset class simultaneously.
Positioning BOTTOM LINE
Key Facts
— The week ended with every gain from Wednesday and Thursday erased. The S&P fell 1.2% from its 7,500 record. The Dow lost 50,000. Brent surged back to $110 on Trump’s Iran warning. Michigan Sentiment set a record low at 48.2. Fed cuts for 2026 are fully priced out. The Ibovespa closed at 177,284 after touching 175,417 intraday — the deepest point of the 2026 correction at 11.7% below the ATH. The BRL at R$5.05 has deteriorated further above R$5.00. The correction has now lasted three weeks with no confirmed reversal signal.
— Monday’s Focus survey at 07:25 BRT is the week’s first macro event and sets the tone for the Copom‘s June debate. A 10th consecutive rise in IPCA expectations (to 5.1%+) would signal the June cut is dead and likely push the Ibovespa toward retesting 175K. A stabilization at 5.0% would be the first constructive signal in two months. The IBC-Br at 08:00 BRT tests the deceleration thesis. Nvidia earnings Wednesday is the week’s global event — a beat and strong guidance could reignite the AI-led rally that pushed the S&P to 7,500; a miss would confirm the tech profit-taking thesis and add to EM pressure.
—Bias: Bearish into the week, with 175K as the line. The Ibovespa’s RSI signal at 32.72 is approaching oversold but the MACD histogram at −2,829 shows no deceleration. The BRL above R$5.05, Brent at $110, and no Fed cuts in 2026 form a tighter constraint set than at any point since the war began. The only constructive catalyst visible is a Focus stabilization Monday morning or an Iran deal breakthrough — neither of which is the base case. Watch Focus at 07:25, IBC-Br at 08:00, and Nvidia Wednesday.
Frequently Asked Questions
Why did the S&P 500 fall 1.2% on Friday?
The S&P 500 fell 1.24% to 7,408.50 on May 15 as investors took profits in technology stocks after a week of record highs, per Trading Economics and FRED data. Intel fell 5%, AMD and Micron dropped 3-4%, and Nvidia lost 2%. Brent’s surge back to $110 on Trump’s Iran warning, Michigan Consumer Sentiment hitting a record low of 48.2, and the market fully pricing out Fed rate cuts for 2026 added to the selling pressure.
How deep is the Ibovespa’s correction now?
The Ibovespa closed at 177,283.83 on May 15 but hit an intraday low of 175,417.25 — a 23,241-point (11.7%) decline from the 198,658 ATH set on April 14, per B3 data. The MACD histogram at −2,829 is a new cycle extreme. RSI signal at 32.72 is approaching the 30 oversold threshold. The correction has lasted three weeks with no confirmed technical reversal signal.
Are Fed rate cuts still expected in 2026?
No. Traders have fully priced out any Federal Reserve rate cuts for 2026, per Trading Economics, following the CPI at 3.8% (May 12), PPI at 6.0% (May 13), and the 30-year yield breaching 5%. CME FedWatch earlier this week showed a 30% probability of rate hikes by December. This is a structural shift from the start of the war, when markets expected 2-3 cuts. For Brazil, the no-cuts repricing narrows the Selic carry differential and weakens the BRL’s structural support.
When does Nvidia report earnings?
Nvidia reports Q1 FY2027 earnings on Wednesday, May 20, after market close. The company’s market cap reached a record $5.7 trillion on May 14 before pulling back 2% on Friday. Nvidia’s results are the most anticipated corporate event of May, with implications for the AI trade that has powered the S&P above 7,500. The US approval of H200 chip sales to 10 Chinese firms during Trump’s Beijing visit adds a geopolitical dimension to the earnings call.
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