The Decoupling Deepens
Today’s Brazil’s Financial Morning Call opens with the Ibovespa pulling further away from Wall Street. This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.
Tuesday delivered a second consecutive decoupling session. The Ibovespa gained 0.32% to 182,509 — driven by Petrobras (+2.69%) on Brent’s return above $104 — while the S&P 500 fell 0.37% and the Nasdaq dropped 0.84%. The Copom minutes struck a cautious tone, flagging re-accelerating activity and elevated inflation expectations, but the market read it as consistent with one more 25 bps cut before a pause.
Wednesday brings the first concrete test of de-escalation credibility. US futures are up 0.7-1.0% on reports the NYT reported a US 15-point peace proposal and Iran offered a “goodwill gesture.” German Ifo business climate (05:00 ET), ECB President Lagarde (04:45 ET), UK CPI, and US import/export prices will show whether the war damage to global confidence is deepening — or if Monday’s relief has legs.
Three Things That Matter
| Tuesday | Ibovespa +0.32% to 182,509 — Petrobras +2.69% drove gains as Brent surged back to $104.49 (+4.55%). Decoupled from NY: S&P −0.37%, Nasdaq −0.84%, Dow −0.18%. USD/BRL +0.25% to R$5.25. DI curve steepened on hawkish Copom minutes. Gold bounced +1.72% to $4,551. 10Y rose to 4.39%. Iran started charging $2M/voyage Hormuz transit fees (Bloomberg). Government announced R$1.6B spending freeze. Fiscal deficit projected at R$59.8B before exclusions |
| Overnight | US futures +0.7-1.0% on NYT report of US 15-point peace proposal to Iran. Iran reportedly offered “goodwill gesture.” Trump ordered 2,000 troops to region. Brent easing to ~$100. Asia positive: Kospi rising, Hang Seng +1.6%. Apollo shares −3% after private credit cap. Circle crashed 19% on stablecoin yield legislation threat |
| Today | ECB Lagarde speaks (04:45 ET). German Ifo Business Climate (05:00 ET, cons: 86.3, prev: 88.6) — sharp decline expected. UK CPI (03:00 ET, cons: 3.0%). FGV Consumer Confidence (07:00 BRT). US Import/Export Prices (08:30 ET). EIA crude inventories (10:30 ET, prev: +6.2M). ECB Lane (05:15 ET). 5Y Note Auction (13:00 ET). FX Flows (13:30 BRT). War Day 26. Trump 5-day pause: Day 4 of 5 |
Where We Left Off TUESDAY, MAR 24 — B3 CLOSE
The Ibovespa opened lower, briefly dipping below 180,000 in the first hour as the Copom minutes struck a cautious tone, then staged a steady recovery to close at 182,509.14 (+0.32%). Petrobras was the engine — ON +2.55%, PN +2.69% — as Brent’s 4.55% rebound to $104.49 reversed Monday’s crash. Minerva led the index at +4.80%, while Azzas 2154 was the biggest loser at −2.83%.
The Copom minutes at 07:00 BRT were the morning’s key domestic event. The BCB said the “magnitude and duration of the cutting cycle will be determined over time as new information is incorporated.” It flagged re-acceleration of economic activity in early 2026 and still-elevated inflation expectations. The DI curve steepened in response — the market now sees the May cut as likely but not locked in, with a potential pause thereafter if oil stays above $100.
Wall Street faded. The S&P 500 lost 0.37% to 6,556, the Nasdaq dropped 0.84%, and the Dow shed 84 points. Salesforce (−6.2%), IBM (−3.1%) and Microsoft (−2.7%) led the Dow’s decline. Iran’s resumption of Hormuz transit fees ($2M/voyage per Bloomberg) and Tehran’s continued denial of direct talks kept risk appetite capped.
The government announced a R$1.6 billion spending freeze to meet the fiscal target, projecting a deficit of R$59.8 billion before exclusions. While the headline sounds alarming, the fiscal framework allows for abatements that bring the balance to a R$3.5 billion surplus — within the 0.25% GDP target with its ±0.25pp tolerance band. As tracked in yesterday’s Morning Call, Brazil’s domestic story continues to diverge from the global selloff.
Market Snapshot DATA AS OF TUE, MAR 24 CLOSE
| Indicator | Close | Change |
|---|---|---|
| Ibovespa | 182,509 | +0.32% |
| USD/BRL | R$5.25 | +0.25% |
| S&P 500 | 6,556 | −0.37% |
| Nasdaq | 21,762 | −0.84% |
| 10Y Treasury | 4.39% | +6 bps |
| Gold (Spot) | $4,551 | +1.72% |
| Brent Crude | $104.49 | +4.55% |
| Iron Ore (62%) | ~$102 | ~flat |
| DXY | ~99.3 | +0.58% |
What to Watch WEDNESDAY CATALYSTS
ECB President Lagarde speaks at 04:45 ET, followed by Lane at 05:15 ET — their tone on inflation will signal whether the ECB is moving toward hikes or holding. The German Ifo Business Climate at 05:00 ET (cons: 86.3, prev: 88.6) is expected to show a sharp deterioration, the first major confidence indicator to capture the full war impact.
UK CPI at 03:00 ET (cons: 3.0% YoY, core: 3.1%) will show whether the war’s energy pass-through is materializing in developed-market inflation. FGV Consumer Confidence in Brazil at 07:00 BRT (prev: 86.1) captures domestic sentiment. US import/export prices at 08:30 ET will reveal how much war-driven oil costs are feeding into trade prices.
EIA crude inventories at 10:30 ET (prev: +6.2M barrels) are the energy market’s key data point. A large build would signal weakening demand and be bearish for oil; a draw would confirm tight supply conditions. The 5-year Note auction at 13:00 ET tests demand for US duration risk after last week’s poor results. This is Day 4 of Trump’s 5-day strike pause — the diplomatic window narrows tomorrow.
Ibovespa Setup TECHNICAL LEVELS
The Ibovespa closed Tuesday at 182,509.14 (+0.32%), consolidating Monday’s massive surge. Daily RSI ticked to 51.65 (MA: 46.19) — second consecutive session above 50, confirming the momentum shift from bearish to neutral. The MACD histogram improved to −172.89 (MACD: −411.21, signal: −584.10), narrowing further toward a bullish crossover.
Resistance: 182,739 (upper Bollinger cluster) → 183,831 (late Feb swing) → 184,374 (1H resistance) → 191,220 (all-time high).
Support: 181,674 (recent close cluster) → 180,788 (50-day SMA) → 179,755 (lower SMA) → 177,185 (intermediate) → 174,257 (lower Bollinger / 200-day area).
The consolidation above 182,000 after Monday’s surge is technically constructive. The index held the 50-day SMA area on Tuesday’s intraday dip to 179,915, then recovered. With US futures up 0.7-1.0% overnight on de-escalation hopes, Wednesday could test the 183,000-184,000 resistance zone. A close above 183,831 opens the path back toward the March highs.
Copom Watch SELIC AT 14.75% · NEXT MEETING: MAY 6-7
Tuesday’s Copom minutes were more cautious than the post-meeting communication. The BCB emphasized that the cutting cycle’s pace and terminal rate will be “calibrated over time” based on incoming data, and warned that “maintaining monetary policy at a more restrictive level for longer may be necessary” if inflation expectations remain unanchored.
The minutes flagged two specific concerns: re-acceleration of economic activity in early 2026 and the persistence of elevated inflation expectations despite the rate cut. The DI curve repriced in response, with longer-dated rates rising and the market now pricing a higher probability of a pause after the May meeting.
The base case remains one more 25 bps cut to 14.50% in May, followed by an extended hold. But if Brent stays above $100 through April and the Focus Survey begins drifting higher, even the May cut becomes contingent. The BCB’s message is clear: they cut because conditions warranted it in March, but they’re not on autopilot.
Economic Calendar WEDNESDAY, MAR 25
| Time | Event | Impact |
|---|---|---|
| 03:00 ET | UK CPI (Feb, YoY cons: 3.0%, Core cons: 3.1%). UK PPI. First major DM inflation print to capture war energy pass-through | HIGH |
| 04:45-05:15 ET | ECB Lagarde speaks (04:45). German Ifo Business Climate (05:00, cons: 86.3, prev: 88.6). ECB Lane (05:15). Confidence + central bank tone in one hour | HIGH |
| 07:00 BRT | FGV Consumer Confidence (Mar, prev: 86.1). Brazil domestic sentiment after Copom cut and war volatility | MEDIUM |
| 08:30 ET | US Import Price Index (Feb, cons: +0.2%). Export Price Index. Current Account (Q4). Trade price data showing oil pass-through | MEDIUM |
| 10:30 ET | EIA Crude Oil Inventories (prev: +6.2M barrels). Build = demand weakness / bearish oil. Draw = tight supply / bullish oil. Key for Brent direction | HIGH |
| 13:00 ET | 5-Year Note Auction — Tests US duration demand after recent weak results. FX Flows (13:30 BRT). War Day 26: Trump pause Day 4 of 5 | MEDIUM |
Latin America Markets TUESDAY CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 182,509 | +0.32% | 51.65 | Neutral |
| IPC (Mexico) | 65,775 | +2.18% | 38.34 | OS Watch |
| COLCAP (Colombia) | 2,238 | +0.31% | 48.41 | Neutral |
| IPSA (Chile) | 10,206 | −0.21% | 35.99 | Oversold |
| MERVAL (Argentina) | 2,778,025 | +1.93% | 52.02 | Neutral |
Mexico’s IPC was the standout, surging 2.18% to 65,775 in a powerful oversold bounce — its RSI had been below 31. Chile’s IPSA slipped 0.21% and is now the only LatAm index with RSI below 36, approaching oversold territory. The MERVAL chart appears stale (showing Monday’s data), though the +1.93% gain aligns with broad LatAm momentum.
The COLCAP finally updated, closing at 2,238 (+0.31%) with RSI recovering to 48.41 — firmly back in neutral. Across the region, the pattern is clear: oil exporters (Brazil, Colombia) are benefiting from Brent above $100, while oil importers (Chile, Mexico) are paying the price. As tracked in our Ibovespa market reports, Brazil’s two-day decoupling from Wall Street is the strongest since the war began.
Commodities & FX KEY MOVES
Brent surged 4.55% to $104.49, recapturing the $100 level it lost on Monday’s crash. WTI rose 4.79% to $92.35. The rebound reflects skepticism about the durability of the 5-day pause — Iran’s denial of direct talks and the resumption of Hormuz transit fees suggest the strait remains functionally closed. Early Wednesday, Brent is easing toward $100 on the NYT peace proposal report.
Gold bounced 1.72% to $4,551 from the daily chart, marking the first positive session in over a week. Silver surged 2.87% to $73.20, recovering from last week’s $62 lows. The precious metals are finding a floor as the acute forced-selling pressure subsides, though both remain well below their war-period highs.
USD/BRL edged to R$5.25 (+0.25%), a modest give-back after Monday’s 1.49% rally. The real outperformed EM peers despite the cautious Copom minutes, supported by Petrobras-driven equity inflows and the carry at 14.75%. The BCB sold $1.8 billion in a dollar repo auction Monday, signaling it has firepower to defend the currency.
DXY rose 0.58% to ~99.3, reversing Monday’s de-escalation-driven decline as the Iran uncertainty returned. The 10-year yield climbed 6 bps to 4.39%, partially undoing Monday’s relief move. Fed rate cut odds have collapsed to ~9% for the year, with an 8% chance of a hike now being priced at the next meeting.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| The 15-point US peace proposal is the first structured negotiation framework — Previous de-escalation signals were tweets and press conferences. A detailed written proposal represents a qualitative shift from rhetoric to diplomacy. If Iran engages with specific terms, the off-ramp becomes real.
Brazil’s two-day decoupling proves the domestic thesis is alive — The Ibovespa gained 3.56% over two sessions while the S&P 500 net gained only 0.78%. The Copom cut, 14.75% carry, and commodity exposure create a fundamentally different investment case from US equities. Gold’s bounce and silver’s 2.87% surge signal the forced-selling wave has ended — Both precious metals posted their first positive sessions in over a week. When forced liquidation ends, broader risk sentiment typically improves. Mexico’s IPC +2.18% suggests LatAm oversold bounces have further to run — The IPC was trading at RSI 31 — capitulation territory. Its sharp bounce suggests a broader EM rotation is underway. |
Brent is back above $104 — Monday’s oil crash was the mirage, not the trend — The Strait of Hormuz remains functionally closed, Iran is now charging transit fees, and no tanker traffic has resumed. Until physical oil flows restart, sub-$100 Brent was a fake-out.
The Copom minutes reveal a BCB that’s more cautious than the market assumed — The language about “maintaining restrictive policy for longer” and flagging re-accelerating activity suggest the May cut is conditional, not guaranteed. If the DI curve keeps steepening, rate-sensitive names give back gains. US futures’ overnight strength may fade once European data lands — The German Ifo is expected to show a sharp deterioration to 86.3. If UK CPI surprises to the upside, the stagflation narrative re-engages and European equities drag. Day 4 of 5 on the Trump pause — and Iran hasn’t reciprocated — Tehran denied talks, continued strikes on Israel, and imposed Hormuz fees. If the 5-day window expires Friday with no tangible progress, the ultimatum reactivates and Monday’s rally fully reverses. |
Positioning BOTTOM LINE
Wednesday is a data and diplomacy day. The decoupling thesis survived its first test — the Ibovespa held gains while Wall Street faded. Now the Ifo, UK CPI, and EIA data will show whether the war’s real-economy damage is accelerating or if the oil relief from Monday bought time.
The positioning logic is increasingly two-track. For Brazil-specific exposure, the Copom minutes support builders and banks *if* oil stays near $100 — but not if Brent re-tests $110. For global exposure, the 5-day countdown is everything: a credible diplomatic outcome by Friday sends risk assets sharply higher; failure resets the war premium.
Petrobras remains the index’s swing factor. At $104 Brent, PETR4 is a buy for income investors (dividend yield above 10%). At $85 Brent post-ceasefire, the stock gives back 10%+ but the rest of the index rallies 5%+. Position sizing should reflect this asymmetry.
The 5-day window closes Friday. Every headline from now until then moves oil, moves Brazil, and moves LatAm. Stay positioned for both outcomes.
RT Staff Reporters · This newsletter is for informational purposes only and does not constitute investment advice. Always consult a licensed financial advisor before making investment decisions. Past performance does not guarantee future results.