Brazil Pauses Rate Cuts at 13.75% as Stocks Rise 1.2% | Morning Call, Nov 5

Source: market close, 4 November 2026.

01 The setup in one read

Brazil wakes up to a central bank that has stopped mid-stride. After five consecutive cuts from 15%, the Copom held the Selic at 13.75% on Wednesday, and the vote was unanimous.

The statement said the outside world had become more hostile because of prolonged armed conflicts in the Middle East, which affect oil prices. It also said inflation expectations in the central bank’s Focus survey of economists had drifted further from target, at 5.2% for 2026 and 4.8% for 2027, and it urged caution on fiscal uncertainty.

The committee gave no commitment on its next step. It said only that it would keep “adequate restriction” in place so that inflation heads to target.

Yesterday’s rally is one line of context: the Ibovespa, Brazil’s main stock index, ended a losing run on the back of Wall Street’s strong response to the US election result. It has still lost 19.02% over the past 20 sessions and sits 19.9% below its 9 October peak, so the buyers have plenty of ground to recover.

02 Where Brazil is set to open

Read the table as a map of what matters rather than a forecast. Pre-market indications for the index, the real and futures were not available, so the column says so instead of guessing.

The board below shows the closing levels. The point is where the pressure lies: the real has support from some of the world’s highest real interest rates, while stocks must fight the same rates and a fall in oil.

03 On the B3 radar today — industrial production and the Copom hangover

The feed lists the Brazilian releases in Lisbon time, so we have converted them to Brasília time by subtracting three hours. Please check the exact minute against the statistics institute IBGE’s calendar before trading.

The pattern in the forecasts is a cooling economy, with both surveys expected below 50. That is the argument for rate cuts to resume, and the Copom has not ruled it out.

04 Copom and the macro backdrop

The Copom held at 13.75% after cutting from 15% since March, and the statement did not signal a next step. Brazil still has one of the world’s highest real interest rates.

The minutes of the meeting are due on Tuesday 10 November, the next dated chance to learn how the committee weighed cutting against holding. The next rate decision is expected in December.

Abroad, Democratic gains in the US midterms have lifted Wall Street, and local press ties the shift in mood to the election result. Oil’s slide helps inflation but hurts the biggest listed earner, which is why this is a mixed backdrop for Brazil.

Other data landed on Wednesday. In the United States, the Institute for Supply Management (ISM) services index slipped to 54.5 from 54.9 against a 54.8 forecast. Its business activity gauge fell to 53.8 from 56.5, new orders to 55.9 from 59.8 and employment rose to 51.4 from 50.1. ADP, the payroll processor, counted 86,000 private jobs in October against 69,000 expected and 90,000 before. The US trade balance (a deficit) narrowed to US$105.0 billion in September against a forecast deficit of US$108 billion (consensus -108, previous -105.6). The weekly crude report also covers the Cushing, Oklahoma, hub, whose latest change was not available to us.

In Brazil, net payrolls in the Caged report, the labour ministry’s formal-jobs count, showed 121.3 thousand net jobs in September against 171 thousand expected (consensus 171) and 165.83 thousand before, the weakest September since 2020. São Paulo’s IPC-Fipe consumer price index rose 0.44% in October from 0.51% in September, against a 0.7% forecast. Both hint at a cooling economy, which supports the argument for rate cuts to resume.

Today, US initial jobless claims are due at 13:30 Lisbon time with 196 thousand expected against 194 thousand before (consensus 196, previous 194), plus continuing claims at 1.71 million (1.701 million before), the four-week average at 196 (196.75 before) and nonfarm productivity at 2.5% (1.4% before). They matter for Brazil because a firm US labour market keeps US yields high and the dollar firm against the real.

05 Corporate stories to watch today

Petrobras and PRIO are the names in play because both move with crude oil, and crude has fallen sharply. They were the heaviest weights on the board, so their direction sets much of B3’s tone.

C&A, the clothing retailer, reported third-quarter adjusted net profit of R$56.5 million (about US$10 million), lower than a year earlier but ahead of estimates. Reported profit was R$170.3 million (about US$31 million), lifted by tax credits. For a consumer company, a beat in a high-rate economy is worth noting.

GPA, owner of the Pão de Açúcar supermarkets, posted a net loss of R$220 million (about US$40 million) from continuing operations; the total loss was R$731 million (about US$134 million). It says it has captured R$365 million (about US$67 million) in cost cuts this year, 88% of its target, so the market will weigh the turnaround against the loss.

Axia, the former Eletrobras, saw its adjusted nine-month profit nearly double. We have no confirmed ex-dividend dates for today.

06 The levels to watch at the open

For the Ibovespa, the 12-month high of 209,067 on 9 October is far overhead, and the index is 9.3% above its 12-month low of 153,294, set on 5 November 2025. The round numbers of 160,000 and 170,000 are the nearer markers.

For the dollar against the real, the 12-month high is 5.59 on 22 December 2025, 2.3% above the latest close. The 12-month low is 4.89, set on 11 May 2026, and 5.50 is the round level to watch.

The dollar has gained 8.82% against the real over 20 sessions. In our own history since 2007, after 26 earlier independent moves at least that large, the dollar was higher 20 sessions later in 12 cases, or 46%; the median was -1.0% and the worst case -11.4%. History is not a forecast, but it says a sharp rise has often faded rather than run on.

For Latin America, a steadier real helps importers and dollar borrowers in Brazil, while weaker oil weighs on oil exporters’ budgets and listed producers across the region. The Mexican peso and Chilean peso both strengthened yesterday, so the move was regional rather than only Brazilian.

07 What to watch

• Industrial production: The 09:00 BRT release shows whether high interest rates are cooling output enough to bring Selic cuts back.
• PMIs: Services and composite surveys forecast below 50 would signal contraction and support the case for easing.
• Oil and Petrobras: Whether crude steadies decides the direction of Petrobras and PRIO, the heaviest weights on the board.
• Copom minutes: Due Tuesday 10 November; the first detailed look at why the committee paused.

Background: Brazil Power Giant Earns US$204M in Third Quarter.

Background: Soybean Fund Slips 0.7% as Corn Gains 1.22%.

Frequently Asked Questions

What did the Copom decide?

It held the Selic at 13.75% on 4 November in a unanimous vote, ending five straight cuts that began in March from 15%.

When is the next Copom decision?

The next rate decision is expected in December. Prediction markets on Polymarket see a hold as most likely.

What Brazilian data is due today?

Industrial production at about 09:00 BRT and the S&P Global services and composite PMIs at about 10:00 BRT, converted from Lisbon time in our feed.

Which stocks are in focus?

Petrobras and PRIO because of oil’s slide, plus C&A, GPA and Axia after their third-quarter results.

Market data: The Rio Times

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief

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