Brazil’s Financial Morning Call for September 19, 2025
Brazil’s markets opened today under pressure from mounting fiscal and political strains.
Municipal finances remain fragile despite a sharp rise in 2024 federal transfers—FPM funds jumped from R$120 to R$177 billion and Fundeb from R$48 to R$87 billion.
Yet 36% of cities, home to 46 million residents, are still in difficult or critical condition. Payroll costs, up 29% since 2019, outpace inflation and deepen local dependence on federal aid.
Firjan’s fiscal index reached 0.6531, its highest since 2013, highlighting structural imbalances.
While 1,601 municipalities direct at least 12% of revenues to development, 938 commit barely 3.2%, underscoring uneven capacity.
Political risks add to investor concerns. Congress voted 311–163 to fast-track an amnesty for supporters of the January 8, 2023 coup attempt and related protests.
The bill could pardon financial, logistical, and online backers—excluding violent crimes and donations above R$40,000.
Critics warn it weakens rule of law, undermines court rulings, and may deter foreign investment, while Speaker Hugo Motta argues it is needed for national reconciliation.
Today’s economic agenda features global retail sales, producer prices, central bank speeches, and speculative position data to gauge consumer demand, inflationary pressures, and positioning in commodities and currencies.
These indicators are critical for Brazil’s export-reliant economy, which is grappling with municipal fiscal woes, amnesty-driven uncertainty, and sustained high Selic rates at 15 percent amid 5.1 percent inflation.
Key releases include UK retail sales at 02:00 AM EST (03:00 AM BRT), German PPI at 02:00 AM EST (03:00 AM BRT), and CFTC positions at 03:30 PM EST (04:30 PM BRT).
These data points could signal shifts in global trade flows and risk appetite, influencing demand for Brazilian agriculture, metals, and energy exports while testing the real’s resilience against U.S. dollar strength.
Economic Agenda
Brazil
No major domestic releases scheduled today; focus shifts to global cues amid fiscal and political headlines. However, the CFTC BRL speculative net positions at 03:30 PM EST (04:30 PM BRT) will reveal trader bets on the real, vital after its rebound to USD/BRL 5.3050 amid diverging BCB-Fed policies and 5.1 percent inflation justifying the 15 percent Selic.
This shapes currency stability in a high-rate environment strained by municipal dependencies and amnesty risks.
These releases are pivotal for understanding Brazil’s economic trajectory, currency stability, and investor confidence amid global trade pressures and domestic fiscal-political signals. Globally, several indicators will influence Brazil’s commodity-driven economy:
Key Events
Asia
- 08:00 AM EST / 09:00 AM BRT – CNY FDI (Aug): Act TBD, Cons TBD, Prev -13.40%. Gauges foreign investment in China, indirectly signaling demand for Brazilian commodities like iron ore and soy, critical amid municipal fiscal strains and amnesty uncertainty impacting investor flows.
- 21:15 PM EST / 10:15 PM BRT – CNY PBoC Loan Prime Rate (Sep): Act TBD, Cons TBD, Prev 3.50%. Tracks lending trends, affecting Asian demand for Brazilian exports.
- 21:15 PM EST / 10:15 PM BRT – CNY PBoC Loan Prime Rate: Act TBD, Cons TBD, Prev 3.00%. Influences broader credit conditions for commodity buyers.
- 02:30 AM EST / 03:30 AM BRT – JPY BoJ Press Conference: Provides monetary policy signals, influencing yen strength and global liquidity for Brazilian assets.
Europe
- 02:00 AM EST / 03:00 AM BRT – EUR German PPI (YoY) (Aug): Act -2.2%, Cons -1.8%, Prev -1.5%. Tracks wholesale deflation, relevant for Brazilian export pricing amid amnesty-driven risk premiums.
- 02:00 AM EST / 03:00 AM BRT – EUR German PPI (MoM) (Aug): Act -0.5%, Cons -0.1%, Prev -0.1%. Signals short-term price trends, impacting commodity margins.
- 02:45 AM EST / 03:45 AM BRT – EUR French Business Survey (Sep): Act 96, Cons 96, Prev 97. Gauges business sentiment, affecting demand for Brazilian goods.
- 05:00 AM EST / 06:00 AM BRT – EUR ECB President Lagarde Speaks: Policy remarks will influence Eurozone sentiment, affecting Brazilian exports.
- 05:30 AM EST / 06:30 AM BRT – EUR ECB Supervisory Board Member Tuominen Speaks: Provides supervisory insights, influencing risk sentiment.
- 06:00 AM EST / 07:00 AM BRT – EUR ECOFIN Meetings: Act TBD, Cons TBD, Prev TBD. Discusses fiscal coordination, relevant for Brazil’s municipal transfer dependencies.
- 06:00 AM EST / 07:00 AM BRT – EUR Eurogroup Meetings: Act TBD, Cons TBD, Prev TBD. Shapes eurozone policy, impacting flows to emerging markets.
- 02:00 AM EST / 03:00 AM BRT – GBP Core Retail Sales (YoY) (Aug): Act 1.2%, Cons 0.8%, Prev 1.0%. Measures consumer trends, influencing global demand.
- 02:00 AM EST / 03:00 AM BRT – GBP Core Retail Sales (MoM) (Aug): Act 0.8%, Cons 0.3%, Prev 0.4%. Signals short-term spending, relevant for Brazilian commodities.
- 02:00 AM EST / 03:00 AM BRT – GBP Public Sector Net Borrowing: Act 18.00B, Cons 12.80B, Prev 1.05B. Tracks fiscal health, paralleling Brazil’s municipal woes.
- 02:00 AM EST / 03:00 AM BRT – GBP Public Sector Net Cash Requirement (Aug): Act 10.158B, Cons TBD, Prev 2.644B. Reflects government spending trends.
- 02:00 AM EST / 03:00 AM BRT – GBP Retail Sales (MoM) (Aug): Act 0.5%, Cons 0.4%, Prev 0.5%. Gauges consumption, affecting export markets.
- 02:00 AM EST / 03:00 AM BRT – GBP Retail Sales (YoY) (Aug): Act 0.7%, Cons 0.6%, Prev 0.8%. Influences broader demand signals.
North America
- 08:00 AM EST / 09:00 AM BRT – MXN Aggregate Demand (QoQ) (Q2): Act TBD, Cons TBD, Prev -1.10%. Tracks regional demand, impacting LatAm trade.
- 08:00 AM EST / 09:00 AM BRT – MXN Aggregate Demand (YoY) (Q2): Act TBD, Cons TBD, Prev -0.20%. Signals growth trends.
- 08:00 AM EST / 09:00 AM BRT – MXN Private Spending (QoQ) (Q2): Act TBD, Cons TBD, Prev -0.40%. Reflects consumer activity.
- 08:00 AM EST / 09:00 AM BRT – MXN Private Spending (YoY) (Q2): Act TBD, Cons TBD, Prev -0.60%. Affects cross-border flows.
- 08:30 AM EST / 09:30 AM BRT – CAD Core Retail Sales (MoM) (Jul): Act TBD, Cons -0.4%, Prev 1.9%. Measures core consumption.
- 08:30 AM EST / 09:30 AM BRT – CAD Retail Sales (MoM) (Jul): Act TBD, Cons -0.8%, Prev 1.5%. Influences North American demand.
- 08:31 AM EST / 09:31 AM BRT – CAD Retail Sales (MoM) (Aug): Act TBD, Cons TBD, Prev TBD. Provides latest trends.
- 13:00 PM EST / 02:00 PM BRT – USD U.S. Baker Hughes Oil Rig Count: Act TBD, Cons TBD, Prev 416. Signals drilling activity, key for oil prices.
- 13:00 PM EST / 02:00 PM BRT – USD U.S. Baker Hughes Total Rig Count: Act TBD, Cons TBD, Prev 539. Impacts energy sector sentiment.
- 14:30 PM EST / 03:30 PM BRT – USD FOMC Member Daly Speaks: Offers Fed insights, influencing dollar and real.
- 07:30 AM EST / 08:30 AM BRT – INR FX Reserves, USD: Act TBD, Cons TBD, Prev 698.27B. Tracks emerging market flows.
These global events matter as they influence demand for Brazil’s commodity exports (iron ore, soy, oil) and the real’s stability amid municipal fiscal risks, amnesty concerns, and corporate resilience like Caixa’s Q2 profit.
Brazil’s Markets Yesterday
Brazilian traders adopted a cautious stance on Thursday, September 18, 2025, with the Ibovespa edging down 0.06% to 145,499 points, underscoring persistent domestic headwinds despite the Federal Reserve’s 0.25 percentage point rate cut to 4.00–4.25%, which typically bolsters emerging market inflows.
The index traded in a narrow 733-point range, with support at 144,993 and resistance near 145,726, reflecting consolidation amid a 10.75 percentage point U.S.-Brazil rate gap and inflation expectations at 4.8% for next year (above the 3% target), driven by government spending and supply disruptions.
Technicals showed modest bullishness with RSI at 61.8, but overextension via stochastic at 99.4, while moving averages offered support at 135,176.
Trading volume reached R$22.8 billion, with 489 decliners outpacing 441 advancers, as banking stocks like Banco do Brasil rose 1.05% but mining giant Vale slipped 0.19% on soft China iron ore futures; Petrobras fell 0.98% amid weaker crude, offset by Natura’s 16.5% surge post-Avon sale.
The real weakened slightly to 5.31 per dollar, amplifying export pressures amid municipal cash woes and amnesty debates.
U.S. Markets Yesterday
U.S. markets advanced to fresh highs on Thursday, September 18, 2025, fueled by the Fed’s rate cut and hints of further 2025 easing, with tech and small-caps leading despite slightly higher bond yields.
The S&P 500 rose 0.5% to a record 6,631.96. The Dow Jones gained 0.3% to a record 46,142.42. The Nasdaq Composite climbed 0.9% to a record 22,470.73.
The Russell 2000 surged 2.5% to 2,467.70, highlighting small-cap outperformance. Semiconductors shone, with Intel boosted by Nvidia’s $5B investment deal. U.S. 10-year Treasury yields rose to ~4.10% (intraday 4.04%–4.14%).
WTI crude softened to around $63/barrel, while gold held steady at ~$3,670/oz. This momentum supported EM flows, though Brazil’s stubborn response reflected local fiscal and political drags.
Commodities
Brazilian Real
The Brazilian real strengthened to a session low of USD/BRL 5.2949 on Thursday, September 18, 2025—its strongest since June 2024—before closing at 5.3050 amid lighter Friday volumes (trading 5.3050–5.3320), propelled by the 1,000-basis-point yield gap from the Fed’s 25 bps cut versus BCB’s steady 15% Selic, alongside U.S. jobless claims at 231,000 (down 33,000).
Elevated 5.1% inflation and 230%+ credit card rates constrained borrowing, while July unemployment at 5.6% aided spending; fiscal strains showed in 7.6% GDP interest payments and 76.6% public debt.
Technical resistance at 5.3150/5.3570, support at 5.2900/5.2600; risks from hawkish Fed data persist, with today’s CFTC BRL positions at 03:30 PM EST (04:30 PM BRT) guiding sentiment.
Oil Prices
Oil prices remained softer around $63/barrel for WTI on September 18, pressured by post-Fed caution and ample supply, amid U.S. rig counts eyed today at 01:00 PM EST (02:00 PM BRT) via Baker Hughes data.
This weighs on Petrobras revenues, exacerbated by municipal fiscal drags and amnesty uncertainty.
Gold Prices
Gold prices steadied near $3,670/oz on September 18, buoyed by safe-haven demand amid political risks like the amnesty bill and global rate divergence, with CFTC gold positions at 03:30 PM EST (04:30 PM BRT) set to clarify sentiment. This aids Brazil’s mining exports despite fiscal woes.
Silver Prices
Silver prices held firm around recent highs, supported by industrial demand and Fed easing, with CFTC silver positions at 03:30 PM EST (04:30 PM BRT) to signal trends; bolsters Brazil’s mining sector amid amnesty-driven volatility.
Copper Prices
Copper prices showed resilience near $4.60/lb equivalent levels, driven by supply tightness despite China slowdowns, with CFTC copper positions at 03:30 PM EST (04:30 PM BRT) for demand clues; cautiously supports Vale amid regional EM caution.
Cryptocurrencies
Bitcoin steadied near $117,130 on September 18, with Ethereum at $4,574 and Solana at $244.11, defying volatility via altcoin gains (AVAX, MYX double-digits) and Ethereum ETF inflows, though Bitcoin ETFs saw $51M outflows offset by BlackRock’s $149.7M IBIT.
RSI at 59 and MACD upward trend reflect cautious strength in Brazil’s fintech, with today’s CFTC Nasdaq positions at 03:30 PM EST (04:30 PM BRT) influencing digital trends amid amnesty risks.
Iron Ore Prices
Iron ore prices hovered near $100/tonne on September 18, navigating China property woes, with today’s CNY FDI at 08:00 AM EST (09:00 AM BRT) to hint at demand; pressures Vale despite its $1B energy deal, amid broader commodity positioning via CFTC data.
Companies and Market
Industry Outlook
Brazil’s economy grapples with a 15% Selic rate, municipal cash crunches affecting 46 million via federal transfer dependencies, amnesty debates threatening legal stability and investor confidence, and fiscal pressures like 76.6% public debt, yet corporate resilience shines through Q2 profits and strategic deals.
July’s services growth and tariff relief signal pockets of strength, with the Ibovespa’s 145,499 close and real at 5.3050 reflecting Fed cut optimism tempered by 4.8% inflation forecasts.
A $377 billion tax shift via the Redata regime—eliminating PIS/Pasep, Cofins, IPI on IT gear and waiving import duties for non-domestic items, tied to R&D and green energy—aims to lure global tech over a decade, backed by R$5.2 billion in 2026 budget, positioning Brazil as a sustainable digital hub.
Today’s German PPI at 02:00 AM EST (03:00 AM BRT), UK retail sales at 02:00 AM EST (03:00 AM BRT), and CFTC positions at 03:30 PM EST (04:30 PM BRT) will shape demand for mining, energy, and tech sectors.
Key Developments
Municipal Cash Crunch: Record 2024 revenues via R$177B FPM and R$87B Fundeb fail to stem 36% of cities in crisis, with 29.1% payroll hikes since 2019 fueling inequality and federal aid reliance.
Amnesty Debate: Congress fast-tracks bill to pardon Jan. 8 participants, risking rule-of-law erosion and FDI in the twelfth-largest economy.
Green Data Deal: $377B tax incentives for IT and green data centers to draw tech giants, enhancing digital sovereignty.
Vale Energy Deal: $1B sale of 70% Aliança stake secures renewable power (2,189 MW capacity) and debt reduction to $15–16B, lifting rating to BBB.
Natura Avon Sale: £1 deal (up to £60M contingent) sheds loss-making international ops, cutting debt/EBITDA to 2.8× and boosting LatAm focus with Q2 net income R$195M.
Raízen Argentina Exit: Debts over R$15B and Milei-era volatility prompt potential sale of Dock Sud refinery and 700 stations to Vitol, refocusing on Brazil.
Caixa Q2 Profit: R$3.682B ($658M) recurring net income up 12% YoY, despite slowing mortgage originations to R$57.3B; total credit at R$1.294T.
Commodity Pressures: Iron ore ~$100/t and oil $63/bbl face demand risks, while gold $3,670/oz supports mining amid CFTC bets.
Stock Market Dynamics: Ibovespa slips to 145,499 on rate gap and inflation, with Natura +16.5% offsetting Vale -0.19%.
Live Market IntelligenceBrazil Morning Call — Live Board
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Brazil Morning Call — Live Board
-0.06%
173,714.08
-0.06%
66,615.43
+0.39%
10,886.14
-0.56%
3,199,934
+0.46%
2,298.34
+0.58%
57,220.16
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| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 173,714.08 | -0.06% | +28.14% | 173,825.27 | 174,505 | 173,285 | — |
| USD/BRL | 5.11 | +0.19% | -8.19% | 5.10 | 5.13 | 5.10 | — |
| EUR/BRL | 5.84 | +0.16% | -9.65% | 5.83 | 5.86 | 5.83 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| BRENT | 88.10 | +4.59% | +27.17% | 84.23 | 88.32 | 83.71 | 30,189 |
| WTI | 81.78 | +3.58% | +21.44% | 78.95 | 82.07 | 77.93 | 235,014 |
| IRON ORE | 161.91 | — | +66.54% | 161.91 | 161.91 | 1 | |
| GOLD | 4,019 | +0.83% | +19.86% | 3,986 | 4,105 | 4,087 | 22,196 |
| SILVER | 56.33 | +0.77% | +47.36% | 55.90 | 59.94 | 59.46 | 14,445 |
| LITHIUM | 68.38 | -0.70% | +62.23% | 68.86 | 68.77 | 67.07 | 238,663 |
| SOY | 1,203 | +0.67% | +17.05% | 1,195 | 1,204 | 1,187 | 124,466 |
| CORN | 467.50 | +5.89% | +14.44% | 441.50 | 468.25 | 458.75 | 158,875 |
| WHEAT | 682.75 | +1.19% | +24.99% | 674.75 | 685.00 | 666.50 | 81,347 |
| COFFEE | 304.70 | -5.17% | -1.36% | 321.30 | 324.40 | 311.35 | 14,662 |
| SUGAR | 14.82 | +2.63% | -11.89% | 14.44 | 14.94 | 14.39 | 62,013 |
| ORANGE JUICE | 139.35 | +4.15% | -56.28% | 133.80 | 143.80 | 130.25 | 1,268 |
| COTTON | 78.93 | +1.60% | +17.60% | 77.69 | 81.75 | 79.75 | 20,908 |
| BEEF | 220.70 | -2.81% | -1.27% | 227.07 | 223.45 | 220.50 | 25,624 |
| CATTLE | 339.35 | -2.09% | +4.74% | 346.60 | 341.05 | 337.45 | 8,898 |
| COCOA | 5,753 | +10.30% | -26.24% | 5,216 | 5,767 | 5,393 | 14,297 |
| PETR4 | 40.90 | +2.53% | +29.97% | 39.89 | 41.11 | 40.41 | 32,096,300 |
| VALE3 | 72.94 | -0.05% | +34.33% | 72.98 | 73.12 | 72.10 | 13,456,000 |
| SUZB3 | 41.93 | +0.55% | -16.97% | 41.70 | 42.62 | 41.40 | 8,204,800 |
| KLABIN | 17.58 | +1.27% | -6.99% | 17.36 | 17.64 | 17.34 | 3,993,600 |
| SLCE3 | 13.53 | -0.59% | -16.27% | 13.61 | 13.68 | 13.45 | 1,606,900 |
| ABEV3 | 15.63 | +0.19% | +16.12% | 15.60 | 15.75 | 15.51 | 16,160,200 |
| ITUB4 | 41.96 | -1.39% | +20.99% | 42.55 | 42.61 | 41.87 | 19,560,900 |
| BBDC4 | 18.29 | -0.65% | +14.10% | 18.41 | 18.48 | 18.21 | 55,066,000 |
| BBAS3 | 20.49 | -1.30% | -1.21% | 20.76 | 20.83 | 20.26 | 35,688,400 |
| B3SA3 | 15.20 | -1.23% | +10.63% | 15.39 | 15.37 | 15.17 | 48,828,300 |
| WEGE3 | 43.63 | +0.32% | +3.66% | 43.49 | 44.02 | 43.15 | 8,200,700 |
| PRIO3 | 57.85 | +1.87% | +33.60% | 56.79 | 58.00 | 57.07 | 5,306,100 |
| RENT3 | 38.23 | -1.62% | +2.33% | 38.86 | 38.80 | 37.87 | 5,880,900 |
| AZZA3 | 18.59 | +0.32% | -48.91% | 18.53 | 18.74 | 18.32 | 1,449,200 |
| CSNA3 | 5.05 | -0.98% | -36.16% | 5.10 | 5.11 | 5.00 | 7,618,200 |
| GGBR4 | 24.04 | +0.54% | +47.03% | 23.91 | 24.24 | 23.59 | 5,371,400 |
| ENEV3 | 25.68 | -1.04% | +86.63% | 25.95 | 26.18 | 25.66 | 12,337,200 |
| LREN3 | 13.42 | -1.69% | -28.31% | 13.65 | 13.65 | 13.25 | 12,910,100 |
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