Brazil’s Morning Call for Wednesday, March 25, 2026

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

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

Latin America Markets TUESDAY CLOSE

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

Positioning BOTTOM LINE