Brazil’s Financial Morning Call for September 26, 2024
Today’s economic agenda features several key events that could significantly impact Brazil’s financial markets and economic outlook.
The release of the Central Bank’s Quarterly Inflation Report takes center stage, offering crucial insights into Brazil’s inflationary trends and monetary policy direction.
This report gains additional importance following yesterday’s unexpected slowdown in inflation, as revealed by the IPCA-15 data.b
The FGV Industry Survey will provide valuable data on sentiment in the industrial sector, which has recently shown signs of improvement.
The Caged report on formal job creation for August will offer a snapshot of Brazil’s labor market health, a critical indicator of economic recovery.
Additionally, the Treasury’s Monthly Public Debt Report for August will shed light on Brazil’s fiscal position, particularly important given recent projections of fiscal improvement amid market skepticism.
Internationally, the U.S. GDP data for the second quarter and weekly jobless claims will be closely watched, along with a speech by Federal Reserve Chair Jerome Powell.
These events could influence global market sentiment and, by extension, Brazil’s financial markets.
Economic Agenda, Thursday, September 26
Brazil
- 08:00: BCB: Quarterly Inflation Report
- 08:00: FGV: Industry Survey (Sep)
- Caged: Formal Job Creation (Aug)
- Treasury: Monthly Public Debt Report (Aug)
Mexico
- 16:00: Central Bank to announce monetary policy decision
United States
- 09:30: GDP (2nd quarter) – annualized
- 09:30: Unemployment benefit claims (weekly)
- 10:20: Fed: J. Powell’s speech
Brazilian Markets on Wednesday
The Brazilian stock market experienced a downturn on Wednesday, breaking its previous day’s gains.
The Ibovespa, Brazil’s primary stock index, fell 0.43% to close at 131,586.45 points. This decline came despite earlier gains supported by positive economic signals from China.
In the currency markets, the US dollar strengthened against the Brazilian real, rising 0.24% to trade at 5.4761 reais. This movement reflected shifting global economic sentiments and domestic economic data.
U.S. Markets on Wednesday
U.S. stocks retreated from their recent record highs as financial markets worldwide took a pause.
The S&P 500 fell 0.2% to 5,722.26, while the Dow Jones Industrial Average lost 0.7% to close at 41,914.75. The Nasdaq composite remained relatively flat, rising less than 0.1% to 18,082.21.
Gold and Oil Prices
Gold prices hit a record high for the fifth consecutive day as the dollar weakened. This ongoing surge in gold prices could have implications for Brazil’s mining sector.
Meanwhile, oil prices tumbled as demand concerns overshadowed Chinese stimulus measures. This decline could potentially impact Brazil’s energy sector and overall economic outlook.
Corporate News
In the corporate sphere, several Brazilian companies made significant moves:
Prio, a Brazilian oil company, is eyeing a strategic acquisition in Rio’s oil sector, signaling potential growth in the energy industry.
BTG Pactual, a major Brazilian investment bank, is expanding its global reach with a wealth management acquisition in Miami, demonstrating the increasing internationalization of Brazilian financial institutions.
WEG, a Brazilian electrical equipment manufacturer, announced a $100 million investment to expand its production in Brazil, indicating confidence in the domestic market.
China Effect
The Chinese yuan surged to a 16-month high against the dollar, potentially impacting Brazil’s trade dynamics with its largest trading partner. This movement in the yuan could have ripple effects on Brazil’s export-oriented sectors.
Underlying Sentiment
Investors are closely monitoring Brazil’s inflation trends following the release of the IPCA-15 data. The index rose 0.13% in September, lower than August’s 0.19% and significantly below market expectations of 0.29%.
This unexpected slowdown in inflation provides a positive outlook for Brazil’s economy and could influence future monetary policy decisions.
Brazilian officials are projecting fiscal improvement, although market skepticism remains. This divergence between government projections and market expectations could create volatility in Brazilian financial markets in the coming days.
Brazil’s Financial Morning Call for September 26, 2024
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Brazil Morning Call — Live Board
-0.46%
176,723.62
-0.46%
67,298.78
+0.88%
10,916.70
-0.84%
3,319,522
-1.78%
2,283.28
-0.60%
57,575.02
—
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 176,723.62 | -0.46% | +30.55% | 177,547.57 | 177,896 | 176,293 | — |
| USD/BRL | 5.08 | +0.50% | -7.91% | 5.05 | 5.09 | 5.08 | — |
| EUR/BRL | 5.78 | -0.30% | -10.93% | 5.80 | 5.79 | 5.78 | — |
| SELIC | 14.25% | — | — | — | — | — | |
| BRENT | 100.52 | +6.86% | +46.72% | 94.07 | 100.99 | 100.36 | 60 |
| WTI | 92.18 | +6.16% | +41.27% | 86.83 | 92.66 | 92.05 | 2,155 |
| IRON ORE | 161.91 | — | +64.76% | 161.91 | 161.91 | 1 | |
| GOLD | 4,050 | -2.33% | +19.34% | 4,147 | 4,054 | 4,050 | 1,043 |
| SILVER | 57.89 | -3.56% | +47.37% | 60.02 | 57.98 | 57.84 | 128 |
| LITHIUM | 69.02 | +0.03% | +55.17% | 69.00 | 69.68 | 68.65 | 135,477 |
| SOY | 1,241 | +0.65% | +23.39% | 1,233 | 1,250 | 1,236 | 141,251 |
| CORN | 486.75 | +5.36% | +22.15% | 462.00 | 490.25 | 483.00 | 212,025 |
| WHEAT | 694.50 | -1.59% | +28.49% | 705.75 | 710.25 | 693.00 | 73,588 |
| COFFEE | 310.75 | -1.86% | +3.12% | 316.65 | 321.30 | 308.25 | — |
| SUGAR | 14.68 | -0.41% | -9.61% | 14.74 | 14.90 | 14.65 | — |
| ORANGE JUICE | 145.50 | -3.19% | -56.77% | 150.30 | 148.80 | 144.00 | — |
| COTTON | 81.53 | +2.08% | +22.38% | 79.87 | 81.75 | 79.75 | 15,710 |
| BEEF | 221.48 | -0.77% | -2.44% | 223.20 | 221.90 | 217.38 | 19,933 |
| CATTLE | 340.13 | -0.31% | +2.59% | 341.17 | 340.50 | 333.00 | 9,414 |
| COCOA | 5,367 | +0.73% | -36.41% | 5,328 | 5,411 | 5,165 | — |
| PETR4 | 42.95 | +0.87% | +34.26% | 42.58 | 43.49 | 42.86 | 25,169,000 |
| VALE3 | 75.68 | +0.77% | +31.80% | 75.10 | 77.07 | 74.51 | 15,786,100 |
| SUZB3 | 42.43 | -0.54% | -18.01% | 42.66 | 42.82 | 41.78 | 2,360,000 |
| KLABIN | 17.66 | -1.51% | -4.57% | 17.93 | 17.92 | 17.41 | 4,884,700 |
| SLCE3 | 13.77 | -1.36% | -14.13% | 13.96 | 14.06 | 13.69 | 2,340,100 |
| ABEV3 | 15.92 | -1.30% | +17.14% | 16.13 | 16.11 | 15.84 | 18,905,100 |
| ITUB4 | 42.56 | -0.79% | +23.87% | 42.90 | 42.87 | 42.27 | 22,565,100 |
| BBDC4 | 18.72 | -1.32% | +17.88% | 18.97 | 18.99 | 18.68 | 19,153,200 |
| BBAS3 | 20.93 | -0.76% | +3.56% | 21.09 | 21.08 | 20.78 | 18,398,200 |
| B3SA3 | 15.65 | -1.57% | +16.88% | 15.90 | 15.82 | 15.48 | 41,084,700 |
| WEGE3 | 45.67 | -2.29% | +20.15% | 46.74 | 46.86 | 44.68 | 13,576,700 |
| PRIO3 | 60.54 | +1.29% | +42.55% | 59.77 | 61.35 | 60.54 | 6,347,300 |
| RENT3 | 37.14 | +0.00% | +2.51% | 37.14 | 37.19 | 36.03 | 13,202,100 |
| AZZA3 | 17.05 | -4.27% | -54.07% | 17.81 | 17.71 | 17.03 | 2,368,800 |
| CSNA3 | 5.30 | -1.49% | -39.57% | 5.38 | 5.61 | 5.30 | 12,053,100 |
| GGBR4 | 24.06 | +0.00% | +39.72% | 24.06 | 24.41 | 23.83 | 7,631,200 |
| ENEV3 | 25.70 | -1.04% | +83.70% | 25.97 | 25.80 | 25.45 | 3,301,300 |
| LREN3 | 13.37 | -1.26% | -24.16% | 13.54 | 13.48 | 13.23 | 8,057,600 |
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