Brazil’s Financial Morning Call for September 10, 2024
Today’s economic agenda is crucial for market direction, with three key inflation indicators on deck that will influence investors.
The FIPE IPC will provide the latest weekly inflation trends, while the FGV IGP-M first preview for September will offer broader inflationary insights.
Most importantly, the IBGE releases the August IPCA, Brazil’s headline inflation measure.
These figures, especially the IPCA, will be pivotal in shaping monetary policy expectations and could significantly impact Brazilian asset prices.
Market Overview
The IBOVESPA closed yesterday at 134,737.21 points, up 0.12%, reflecting investor anticipation of crucial inflation data and corporate developments.
The Brazilian real strengthened against the dollar, closing at R$5.5817, a 0.15% appreciation. This movement diverged from the global trend, where the DXY index rose by 0.44%.
Economic Agenda, September 10, 2024
Brazil
- 5:00 AM: FIPE: IPC (weekly)
- 8:00 AM: FGV: IGP-M (1st preview) (Sep)
- 9:00 AM: IBGE: IPCA (Aug)
Germany
- 3:00 AM: Consumer Price Index (Aug) – final
Mexico
- 12:00 PM: International Reserves (weekly)
China
- Trade Balance (Aug)
Monetary Policy Outlook
The Focus Bulletin now anticipates the Selic rate to climb from 10.50% to 11.25% in 2024.
The financial sector anticipates that the Selic rate will rise by 25 basis points to 10.75% per annum.
Further increases in the rate are expected at upcoming COPOM meetings, potentially reaching 11.50% by early next year.
Bank of America has revised its forecast, expecting the Selic rate to reach 11.75% by the end of 2024, with a series of rate hikes potentially bringing it to 12% by January 2025.
Inflation and Growth Forecasts
Inflation expectations for 2024 have been revised upward from 4.26% to 4.30%, surpassing the government’s 3% target but remaining within the 4.5% upper limit. GDP growth forecasts for 2024 have improved to 2.68%, up from 2.46%.
Corporate News
- Grupo Mateus (GMAT3) faces a R$1.05 billion tax assessment from the Brazilian Federal Revenue Service, covering fiscal years 2014 to 2021.
- Ultrapar (UGPA3) saw its stock recommendation upgraded from neutral to buy by Santander.
- Vale (VALE3) benefited from recovering iron ore prices.
- Raízen reported that Norway’s sovereign wealth fund Norges Bank acquired a 5.02% stake in its preferred shares.
- Even Construtora e Incorporadora S.A. reduced its stake in Melnick Desenvolvimento Imobiliário to 8%.
- Morgan Stanley decreased its stake in Lojas Renner to 4.9% of total ordinary shares.
- Guepardo Investimentos increased its position in Grupo Fleury to 5.0008% of total ordinary shares.
Global Context
U.S. markets rebounded yesterday, with major indices gaining over 1%. This optimism comes ahead of new inflation data releases.
The Consumer Price Index (CPI) in the U.S. is expected to show a monthly increase of 0.2% and a yearly rise of 2.6%.
Oil Market Outlook
Global trading giants Gunvor and Trafigura forecast oil prices to settle between $60 and $70 per barrel due to slow demand in China and ongoing global surplus.
Oil futures rose by $1 to about $72 a barrel early Monday, propelled by a looming hurricane near the U.S. Gulf Coast.
That concludes our comprehensive Financial Morning Call for Brazil. Stay tuned for updates as these economic indicators are released throughout the day.
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Brazil Morning Call — Live Board
+2.57%
177,179
+2.57%
66,659
+0.83%
10,977
-0.44%
3,237,908
+1.11%
2,297.64
+0.21%
56,194.27
+1.25%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 177,179 | +2.57% | +29.57% | 172,742 | 177,179 | 172,761 | — |
| USD/BRL | 5.10 | -0.27% | -8.59% | 5.12 | 5.13 | 5.10 | — |
| EUR/BRL | 5.83 | -1.04% | -10.83% | 5.89 | 5.86 | 5.83 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| BRENT | 75.65 | -0.85% | +10.21% | 76.30 | 77.56 | 75.31 | 30,274 |
| WTI | 71.18 | -1.25% | +6.93% | 72.08 | 73.16 | 70.77 | 143,888 |
| IRON ORE | 161.91 | — | +67.33% | 161.91 | 161.91 | 1 | |
| GOLD | 4,119 | -0.29% | +24.15% | 4,131 | 4,145 | 4,082 | 76,740 |
| SILVER | 60.27 | -0.18% | +62.72% | 60.38 | 61.20 | 59.25 | 19,989 |
| LITHIUM | 72.38 | -0.60% | +79.78% | 72.82 | 72.63 | 71.91 | 88,622 |
| SOY | 1,190 | +0.89% | +17.56% | 1,180 | 1,199 | 1,173 | 90,226 |
| CORN | 459.50 | +7.42% | +12.83% | 427.75 | 461.00 | 447.50 | 217,746 |
| WHEAT | 639.00 | +4.54% | +16.13% | 611.25 | 649.25 | 614.00 | 122,912 |
| COFFEE | 337.25 | -5.52% | +16.33% | 356.95 | 340.70 | 318.60 | 29,052 |
| SUGAR | 14.84 | -1.85% | -8.73% | 15.12 | 15.14 | 14.71 | 55,839 |
| ORANGE JUICE | 146.45 | -2.30% | -47.69% | 149.90 | 149.95 | 143.25 | 517 |
| COTTON | 80.87 | +6.18% | +22.07% | 76.16 | 79.67 | 78.28 | 15,888 |
| BEEF | 234.58 | -0.29% | +7.00% | 235.25 | 232.15 | 229.00 | 25,474 |
| CATTLE | 353.95 | -0.62% | +10.17% | 356.15 | 358.40 | 351.45 | 7,748 |
| COCOA | 6,026 | -4.49% | -31.07% | 6,309 | 6,310 | 5,777 | 25,223 |
| PETR4 | 39.52 | +0.79% | +22.55% | 39.21 | 39.97 | 39.34 | 15,819,400 |
| VALE3 | 74.42 | +1.74% | +34.62% | 73.15 | 74.49 | 73.12 | 11,624,300 |
| SUZB3 | 41.59 | +1.36% | -16.61% | 41.03 | 41.87 | 41.37 | 4,684,800 |
| KLABIN | 17.49 | +0.52% | -5.63% | 17.40 | 17.64 | 17.44 | 2,787,400 |
| SLCE3 | 13.94 | +1.09% | -13.66% | 13.79 | 14.04 | 13.80 | 1,510,800 |
| ABEV3 | 15.84 | +0.76% | +19.58% | 15.72 | 15.99 | 15.72 | 17,063,500 |
| ITUB4 | 43.89 | +3.05% | +28.33% | 42.59 | 43.91 | 43.23 | 17,050,600 |
| BBDC4 | 18.71 | +3.94% | +15.86% | 18.00 | 18.72 | 18.32 | 24,761,100 |
| BBAS3 | 20.55 | +2.75% | -2.97% | 20.00 | 20.58 | 20.25 | 14,820,800 |
| B3SA3 | 15.44 | +4.39% | +9.58% | 14.79 | 15.50 | 15.19 | 22,366,000 |
| WEGE3 | 46.65 | +1.99% | +16.92% | 45.74 | 46.80 | 46.11 | 3,114,400 |
| PRIO3 | 55.48 | -0.23% | +32.73% | 55.61 | 56.29 | 55.04 | 3,701,000 |
| RENT3 | 40.72 | +3.35% | +6.54% | 39.40 | 41.32 | 40.31 | 3,553,500 |
| AZZA3 | 19.12 | +3.58% | -47.60% | 18.46 | 19.24 | 18.81 | 1,006,400 |
| CSNA3 | 5.15 | +7.29% | -37.94% | 4.80 | 5.18 | 4.95 | 8,387,300 |
| GGBR4 | 22.78 | +1.33% | +35.19% | 22.48 | 23.10 | 22.58 | 5,895,800 |
| ENEV3 | 27.25 | +4.01% | +106.25% | 26.20 | 27.27 | 26.61 | 3,579,800 |
| LREN3 | 14.78 | +4.45% | -22.81% | 14.15 | 14.84 | 14.53 | 5,926,200 |
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