No Floor Found
The Ibovespa found no floor on Thursday, extending its War Week decline to approximately 4.7% from Monday’s close of 189,307 despite Wednesday’s partial recovery. The index fell 2.64% to 180,464 on March 5, touching an intraday low of 179,895 — the first time it has tested the 180,000 handle since late January. Volume thinned to R$32.4 billion from Tuesday’s panic peak of R$46.8 billion, but the selling was orderly and relentless rather than capitulatory. Brent resumed its rally after Wednesday’s brief SPR-hope-driven reprieve, settling up approximately 5% at $85.41 — bringing the cumulative advance from the pre-war close to over 16%. The 10-year Treasury yield climbed further to 4.134% (+5 bps on the day), its highest since mid-February. US equities reflected the renewed pessimism: the Dow Jones lost 1.61% to 47,955, the S&P 500 fell 0.56% to 6,831, while the Nasdaq held up at −0.26% (22,749) as tech outperformed defensively. The war entered Day 6 with Iran’s foreign minister telling NBC News the country “sees no reason to negotiate” a ceasefire — the clearest diplomatic signal yet that Trump’s 4–5 week timeline was optimistic.
The overnight development that will dominate Friday’s open is Petrobras: the company reported after Thursday’s close with full-year 2025 net profit of R$110.1 billion (+201% year-on-year), Q4 net profit of R$15.6 billion (reversal from R$17B loss in Q4 2024), and R$8.1 billion in Q4 dividends — beating consensus estimates of R$6.7 billion by 21%. EBITDA for 2025 reached R$327.2 billion (+11%). This is a genuinely strong result, driven by record export volumes (999 thousand bpd in Q4), operational cost discipline, and the benefit of a weaker real throughout the year. The dividend beat is the most market-sensitive element: it implies approximately R$0.626 per share for PETR3/PETR4. With the stock now trading below R$41 (PETR4 closed Thursday at approximately R$40.69), the dividend yield on this Q4 distribution alone is ~1.5%, which matters in a risk-off environment. Petrobras management holds a conference call today (Friday) — the first opportunity for the market to hear the company’s view on Brent’s surge and Hormuz disruption risk for 2026 production and pricing. That call could be the most consequential market event of the session.
The domestic data calendar delivered mostly in-line results Thursday. Brazil’s unemployment rate remained at 5.4% for the trimester ending January (consensus 5.4%), consistent with a tight but slowly softening labor market. The Trade Balance for February came in at $4.21 billion (slight miss vs $4.23 billion consensus, prior R$3.82 billion) — a solid print reflecting strong commodity export performance. DI futures surged again, with the Jan/28 DI rising 19 basis points to 12.975% and the Jan/35 DI climbing 24 basis points to 13.68% — the curve is now pricing out the March cut in meaningful size and repricing the terminal rate upward. The BCB, still silent after Tuesday’s aborted intervention, faces a communications test at the Copom meeting 12 days from now that grows more complex by the session.
Three Things That Matter
| Overnight | Petrobras 4T25: net profit R$110.1B for 2025 (+201% YoY), Q4 profit R$15.6B, Q4 dividends R$8.1B (beat R$6.7B consensus). Conference call today. Brent settles at $85.41 (+5% on the day). Iran FM: “no reason to negotiate.” War Day 6. 10Y Treasury 4.134%. DXY ~99.23 |
| Thursday | Ibovespa −2.64% to 180,464. PETR4 +0.47% R$40.69 (pre-result). Vale −3.33%, Itaú −3.33%, MBRF −5.65%. USD/BRL ~R$5.28. DI Jan/28 +19 bps to 12.975%. Brazil unemployment 5.4% (in line). Trade Balance $4.21B (slight miss). US: Dow −1.61%, S&P 500 −0.56%, Nasdaq −0.26%. Unit Labor Costs Q4 +2.8% (beat 2.0%) |
| Today | US Nonfarm Payrolls (Feb, 08:30 ET, cons: 58K, prev 130K) — dramatically soft consensus; confirms DOGE + tariff drag on hiring. Brazil Industrial Production (Jan, 07:00 BRT, cons: +0.7% MoM). Petrobras conference call (morning BRT). Embraer 4T25 (before open). NPC Day 2 Beijing. War Day 6 — SPR or ceasefire signal remains market-dominant. BCB Focus Survey (MON) |
Where We Left Off THURSDAY, MAR 5 — B3 CLOSE
The Ibovespa registered its third consecutive loss on Thursday, falling 2.64% to 180,463.84 — matching the intraday low zone from Tuesday and threatening the psychological 180,000 level. The session high was 185,366, meaning the market opened near Wednesday’s close before selling resumed almost immediately. Financial volume fell sharply to R$32.4 billion from Tuesday’s R$46.8 billion — a sign of exhaustion rather than capitulation, with fewer participants willing to take either side aggressively. The decline was broad-based. MBRF (Banco do Brasil’s holding entity) led losses at −5.65%, Vale shed 3.33%, Itaú −3.33%, and Bradesco −3.22%. Petrobras PN (PETR4) was the notable exception, ending +0.47% at R$40.69 in anticipation of its after-market earnings release — a gain that looks dramatically insufficient given the dividend beat announced hours later. JBS fell 3.02% and Ambev −1.99%. The only major positive print was Raízen (RAIZ4), which has emerged as a conflict beneficiary given ethanol’s substitution premium in a high-gasoline environment.
The USD/BRL rate climbed back toward R$5.28 after Wednesday’s brief reprieve to R$5.2184 — the real’s one-session recovery was entirely reversed as oil prices resumed rising and Iran’s foreign minister hardened the diplomatic rhetoric. The DI curve absorbed another session of hawkish repricing: the Jan/28 DI surged 19 basis points to 12.975%, the Jan/35 DI climbed 24 basis points to 13.68%. These are significant moves for a single session and signal that the swaps market has effectively priced out the March 50 bps cut and begun to price tail risk of no cut. In New York, the Dow Jones’ 1.61% loss to 47,954 brought it to its lowest close in over two months. The S&P 500 shed 0.56% to 6,830.71 and the Nasdaq was relatively resilient at −0.26% (22,748.99), with tech defensively outperforming as airline stocks crashed 5.9% on a sectoral basis and gold miners collapsed. The 10-year Treasury yield reached 4.134%, while the VIX remained elevated near 23.61. Unit Labor Costs for Q4 2025 came in at +2.8% (significantly beating the 2.0% consensus), reinforcing the stagflationary narrative in the US.
Market Snapshot DATA AS OF THU, MAR 5 CLOSE
| Indicator | Close | Change |
|---|---|---|
| Ibovespa | 180,464 | −2.64% |
| USD/BRL | 5.2800 | +1.18% |
| S&P 500 | 6,831 | −0.56% |
| Nasdaq | 22,749 | −0.26% |
| 10Y Treasury | 4.134% | +5 bps |
| Gold (Spot) | $5,079 | −1.24% |
| Brent Crude | $85.41 | +5.03% |
| Iron Ore (62%) | ~$107.86 | +1.90% |
| DXY | 99.23 | +0.16% |
What to Watch FRIDAY CATALYSTS
Friday is potentially the most pivotal session of War Week. Three forces compete for the market’s attention — and crucially, two of them now point in the same direction. The Petrobras result provides a discrete positive catalyst: the R$8.1 billion dividend beat and the R$110.1 billion full-year profit should open PETR4 sharply higher, providing direct mechanical uplift to the Ibovespa. The management conference call this morning is the amplifier — bullish guidance on 2026 earnings under elevated Brent extends the move; any operational or fiscal caution gives it back. The second force — and the week’s most market-moving scheduled release — is the February US Nonfarm Payrolls print at 08:30 ET with a consensus of just 58,000 (prior 130,000). This is a dramatically soft consensus, one of the weakest since the post-COVID recovery era, and it signals the street’s expectation that DOGE-driven federal layoffs (government payrolls were −42,000 in January), tariff uncertainty, and energy cost headwinds have materially slowed US hiring in February. A print near or below 58K would confirm a cracking US labor market, give the Fed unambiguous cover to cut in June, and provide the first real relief to the dollar/yield complex that has been strangling EM assets all week. Paradoxically, this would be unambiguously positive for Brazil: a weaker dollar, lower 10Y yield, and a Fed that can cut means the BCB’s own easing path becomes easier to defend. The third force is geopolitics on Day 6, which remains capable of overwhelming everything else in a single headline.
The critical nuance today is the stagflation combination. Retail Sales for January also print at 08:30 ET (consensus −0.3% MoM), potentially confirming that the US consumer is already slowing under tariff and energy cost pressure. If the market receives both weak Payrolls (58K) and weak Retail Sales simultaneously, it will interpret this as recession risk rather than benign disinflation — and recession risk in the US is not straightforwardly positive for EM, because it implies reduced demand for Brazilian exports and further commodity price pressure beyond the oil shock. The worst possible outcome is a stagflationary combination: weak jobs (near 58K) plus sticky wages (hourly earnings holding at +0.3% MoM / +3.7% YoY). Four Fed speakers follow in the afternoon — Goolsbee (09:50), Daly (10:15), Schmid (11:30), Collins (13:20) — and their post-Payrolls tone on the June cut baseline will be closely parsed. Also watch Brazil’s own Industrial Production at 07:00 BRT: consensus is +0.7% MoM (reversing December’s −1.2%), and a beat would provide modest domestic support for the BCB’s “softening but not collapsing” activity narrative ahead of the Copom decision in 12 days.
Ibovespa Setup TECHNICAL LEVELS
The Ibovespa closed Thursday at 180,463.84, a further 2.64% loss and the third consecutive red session. The RSI on the daily chart now reads 44.53 (MA: 63.70) — still in neutral territory and not yet offering an oversold technical floor. The RSI MA gap of nearly 19 points signals that downside momentum is deeply entrenched and the trend-follower community has not capitulated. The MACD continues its bearish configuration. The 50-day SMA (185,338) is now meaningfully above — it has become a cap rather than a floor. The 200-day SMA is visible on the chart at approximately 174,487.
Resistance: 180,242 (Thursday’s intraday reversal level) → 183,105 (Tuesday’s close / prior support) → 185,366 (Thursday’s high / 50-day SMA zone at ~185,738). Support: 179,895 (Thursday’s intraday low — first technical test) → 180,000 (psychological) → 175,716 (intermediate SMA cluster) → 174,487 (200-day SMA — the ultimate structural test). The Petrobras dividend beat creates a genuine asymmetric opening: if PETR4 opens up 4%+, the Ibovespa could gap toward 182,000–183,000 in the first hour, triggering short covering in banks. With Payrolls consensus at only 58K, a weak print is the base case — which would ease the dollar/yield headwind and support the bounce holding. Bias: constructive at the open (Petrobras + weak payrolls probability), with the key downside risk being a Payrolls beat above 100K or a geopolitical escalation.
Copom Watch NEXT MEETING: MAR 17-18 · T−12 DAYS
The Selic sits at 15.00% with 12 days to the Copom meeting. The DI curve is now unambiguously pricing a materially different outcome than the near-certain 50 bps cut that existed one week ago. The Jan/28 DI at 12.975% and the Jan/35 at 13.68% — both up 19–24 basis points in a single Thursday session — reflect a market that is not merely scaling back cut expectations but beginning to price a scenario of no cut or even hold-indefinitely. This is the most significant domestic monetary policy signal of War Week.
The inflation arithmetic continues to deteriorate domestically, but a new counterforce has emerged globally. Brent at $85.41 — up 16.5% from the pre-war close — is the inflationary pressure. But the US Nonfarm Payrolls consensus of 58,000 for February tells a different story: a US labor market decelerating sharply, likely driven by the −42,000 government payrolls of January continuing into February as DOGE federal layoffs spread. A sub-100K payrolls print combined with the Fed’s June cut baseline intact would weaken the DXY and ease the 10Y yield — both of which directly improve the BCB’s room to maneuver. The BCB cannot ignore that its inflation problem is partly imported (Brent), but an easing of the dollar/yield complex would reduce the FX pass-through pressure on IPCA and restore optionality. Finance Minister Haddad’s preference for a March cut remains clear. The critical inputs before the silent period are: today’s Brazil Industrial Production (cons: +0.7% MoM), today’s US Payrolls (cons: 58K), and Monday’s BCB Focus Survey. A Focus showing 2026 IPCA at or above 4.5% would make even 25 bps politically toxic; a Focus still below 4.3% would give the BCB the statistical cover it needs to proceed with a modest cut despite the war shock.
Economic Calendar FRIDAY, MAR 6
| Time | Event | Impact |
|---|---|---|
| Morning BRT | Petrobras 4T25 Conference Call — First management comments on Brent surge and Hormuz impact on 2026 production plan, capex and dividend policy. Result already out: R$110.1B FY profit, R$8.1B Q4 dividends (beat). Tone is everything | HIGH |
| 06:00 BRT | Brazil IGP-DI Inflation (Feb, MoM) — No consensus; prev +0.20%. Broad wholesale/construction/consumer inflation composite. Any acceleration above prev would reinforce the IPCA trajectory concern ahead of Copom | MEDIUM |
| 06:00 BRT | Chile CPI (Feb, MoM) — Cons: +0.1% (prev +0.4%). Relevant for IPSA context and Banco Central de Chile rate path; deceleration from January would ease regional inflation narrative slightly | LOW |
| 07:00 BRT | Brazil Industrial Production (Jan, MoM) — Cons: +0.7% (prev −1.2%); YoY cons: −0.7% (prev +0.4%). Last major domestic activity read before Copom silent period. Weak print reinforces BCB’s softening activity narrative | MEDIUM |
| Before Open | Embraer (EMBJ3) 4T25 Results — Defense/aerospace read; watch order backlog and FX guidance in geopolitical environment | MEDIUM |
| 08:00 BRT | Brazil Auto Production & Sales (Feb, MoM) — No consensus; prev Production −13.5%, Sales −39.0%. January seasonality distorted both. February rebound expected but not quantified; a sharp recovery would signal domestic demand resilience | LOW |
| All Day | Iran-US War Day 6 — Hormuz blockade continues; Iran FM confirmed no ceasefire intent. Any SPR release or ceasefire signal remains market-dominant. Further escalation would overwhelm all scheduled data | HIGH |
| 07:30 ET | Fed Waller Speaks — First Fed commentary after Thursday’s Unit Labor Costs beat (+2.8% vs 2.0%). Any hawkish pivot on the June cut baseline would amplify the 10Y/dollar move before Payrolls | MEDIUM |
| 08:30 ET | US Nonfarm Payrolls (Feb) — Cons: 58K (prev 130K). A dramatically soft consensus — the weakest since the post-COVID recovery. A print near or below consensus confirms a US labor market cracking under tariff and energy cost pressure, giving the Fed cover to cut and easing the dollar/yield squeeze on EM. A beat above 100K would be a genuine surprise and would sustain the higher-for-longer narrative | HIGH |
| 08:30 ET | US Private Nonfarm Payrolls (Feb) — Cons: 65K (prev 172K). The private sector component strips out DOGE-driven government layoffs; a sub-65K private print signals genuine private hiring weakness beyond federal headcount reduction | MEDIUM |
| 08:30 ET | US Average Hourly Earnings (Feb) — Cons: +0.3% MoM / +3.7% YoY (prev +0.4% / +3.7%). After Thursday’s Unit Labor Costs beat, watch for stagflationary combination of weak jobs + sticky wages — the worst possible outcome for risk assets and the Fed’s dilemma | HIGH |
| 08:30 ET | US Retail Sales (Jan, MoM) — Cons: −0.3% (prev 0.0%); Control Group cons: +0.2% (prev −0.1%). Prints alongside Payrolls — a simultaneous demand soft-landing read. Weak retail would reinforce the labor slowdown narrative and add to Fed cut probability | MEDIUM |
| 08:30 ET | US Unemployment Rate (Feb) — Cons: 4.3% (prev 4.3%). A rise above 4.3% would compound the NFP signal; stability at 4.3% with only 58K jobs created implies broad-based weakness. Government payrolls prev −42K — DOGE-related federal layoffs likely extend | MEDIUM |
| 09:50 ET | Fed Goolsbee Speaks — Post-Payrolls reaction; 10:15 ET Fed Daly, 11:30 ET Fed Schmid, 13:20 ET Fed Collins. Four Fed speakers in one afternoon — their collective tone on cut trajectory will shape the close | MEDIUM |
| All Day | China NPC Plenary Day 2 — 15th Five-Year Plan details; 5% growth target and infrastructure investment specifics matter for iron ore outlook and Vale | MEDIUM |
| 12:00 ET | Atlanta Fed GDPNow Q1 Update — Current tracking at 3.0%. Post-Payrolls revision could sharply lower the Q1 estimate if jobs miss, anchoring the recession risk narrative | MEDIUM |
| 14:00 ET | Argentina Industrial Production (Jan, YoY) — No consensus; prev −3.9%. Continued contraction would weigh on MERVAL (already at RSI 30.13); any surprise recovery would be notable given Milei’s reform timeline | LOW |
| 15:00 ET | US Consumer Credit (Jan) — Cons: $12.40B (prev $24.05B). A sharp deceleration in credit growth would add to the demand-slowdown picture alongside today’s Retail Sales; watch for consumer-driven EM sentiment read | LOW |
| 18:00 BRT | Colombia CPI (Feb) — YoY cons: 5.49% (prev 5.35%); MoM cons: +1.27% (prev +1.18%). Acceleration expected. Relevant for COLCAP and Banrep rate path; beat would add to the LatAm central bank dilemma narrative given COLCAP’s relative resilience this week | LOW |
| 15:30 ET | CFTC Weekly Positioning — BRL speculative net positions prev +36.7K (watch for EM FX deleveraging); Crude Oil prev +172.7K (war premium in longs); S&P 500 prev −193.5K (historically large short overhang — squeeze risk on any positive geopolitical signal); Gold prev +159.2K | LOW |
| MON MAR 9 | Brazil BCB Focus Survey — First post-Hormuz projections. Watch 2026 IPCA vs 4.5% ceiling and Selic end-year expectations. Will crystallize whether economists have officially repriced the BCB’s path | HIGH |
| MAR 17–18 | Copom + FOMC Meetings — Both central banks decide same week. Cut size for BCB severely constrained by war/inflation shock; 25 bps, hold, or emergency hold all in play | HIGH |
Latin America Markets THURSDAY CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 180,464 | −2.64% | 44.53 | Neutral |
| IPC (Mexico) | 68,379 | −2.91% | 43.00 | Neutral |
| COLCAP (Colombia) | 2,182 | +0.55% | 36.20 | OS Watch |
| IPSA (Chile) | 10,298 | −1.88% | 34.19 | Oversold |
| MERVAL (Argentina) | 2,570,733 | −0.36% | 30.13 | Oversold |
The regional selloff extended into a fourth consecutive session on Thursday, with no index escaping the gravitational pull of oil-driven risk-off. The most notable development is the RSI compression across the board: MERVAL has now entered oversold territory at 30.13, joining IPSA (34.19) and approaching COLCAP (36.20) — three of five LatAm indices are at or near oversold on the 14-day RSI. The IPC in Mexico recovered from Tuesday’s 40.7 to 43.0, technically still neutral but finding no traction. Brazil’s Ibovespa at 44.53 is the highest RSI in the region, which is not a bullish signal — it reflects the Ibovespa’s relative outperformance earlier in the year rather than any current resilience. The COLCAP’s second consecutive positive close (+0.55%) is the most notable outlier: as a net oil exporter, Colombia is the one major LatAm market where the Brent surge has a directly positive fiscal and export revenue impact. However, with RSI at 36.20 and a MACD still deeply negative, any bounce remains technically fragile. The regional picture — four of five indices in RSI downtrend, three at or near oversold — argues for a tactical bounce candidate on any geopolitical de-escalation, but structural damage has been done and recovery will require multiple sessions of sustained good news.
Commodities & FX KEY MOVES
Brent settled at $85.41, up approximately 5% on the day — the fourth consecutive session of gains and the largest absolute advance of the crisis so far, with the cumulative move from the pre-war close now exceeding 16%. The rally resumed despite Wednesday’s brief SPR-hope reprieve, confirming that the physical supply shock is real and not priced out by diplomatic signaling alone. Iran’s naval assets attacked a tanker in the Arabian Sea on Thursday, a direct escalation that sent WTI above $80 per barrel (+8% on the day to $81.01). Goldman Sachs’ $110/bbl target is now the central scenario on many desks, and JPMorgan’s $120–$130 worst-case range has moved from tail risk to plausible scenario if Hormuz remains closed beyond three weeks. Iron Ore recovered approximately 1.9% at the DCE to ~$107.86 on Wednesday China session, as China’s NPC announcement of its growth target of 5% and infrastructure stimulus pledges provided modest demand optimism. The Five-Year Plan details matter for Vale‘s medium-term outlook — China’s steel production guidance will determine whether iron ore can hold $105–$110 or slides toward $95. Gold continued to consolidate, settling around $5,079 (−1.24%), with the metal oscillating between its geopolitical bid and the dollar/yield headwind. The $5,000–$5,100 zone is the structural support; with geopolitical tensions escalating, a resumption toward $5,200+ is plausible on any new headline shock. USD/BRL returned to R$5.28, erasing Wednesday’s entire R$5.2184 reprieve. The real’s inability to hold even one session of appreciation underscores the fragility of carry-driven positioning in this environment. The BCB’s aborted intervention remains a reputational overhang. DXY moved to 99.23, maintaining its elevation above the psychologically important 99 handle for a third session.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| Petrobras dividend beat rerates the energy sector — R$8.1 billion in Q4 dividends, beating a R$6.7 billion consensus by 21%, combined with R$110.1 billion full-year profit (+201%), positions Petrobras as the clearest domestic beneficiary of the oil surge. At current prices, PETR4 should open significantly higher. A rising Petrobras lifts the Ibovespa mechanically and creates positive sentiment contagion into PRIO and other oil-linked names. The conference call is the amplifier — bullish guidance for 2026 under $85 Brent could extend the move all session.
Payrolls miss confirms dollar/yield relief — The February consensus of just 58K (prior 130K) is already the street’s base case for a cracking US labor market under DOGE-driven federal layoffs, tariff uncertainty, and energy cost headwinds. A print at or below 58K would confirm the Fed’s June cut trajectory is intact, weaken the DXY, ease the 10Y yield, and provide the first real EM relief of War Week. Even a modest beat toward 80–100K would still be read as labor market deterioration given the prior trend, supporting risk assets. Only an outright beat above 130K would sustain the higher-for-longer narrative and renew dollar/yield pressure. China NPC 5% target + stimulus details = iron ore floor — Beijing’s announcement of a 5% growth target with infrastructure investment pledges restores Chinese demand visibility. The Five-Year Plan focusing on high-tech manufacturing and construction would provide a floor under Vale and iron ore prices ($105+), partially offsetting Brazil’s geopolitical discount. Three of five LatAm indices approaching oversold — MERVAL at RSI 30.13, IPSA at 34.19, COLCAP at 36.20 are all in or near oversold territory. The Ibovespa at 44.53 is heading lower but not yet at a capitulation RSI. Any single positive geopolitical headline — ceasefire signal, SPR announcement, US-Iran back-channel confirmed — could trigger a coordinated multi-market short-covering rally of 3–5% in a single session. |
DI curve is pricing a hold — the market knows something — The Jan/28 DI at 12.975% (+19 bps in a single Thursday session) and the Jan/35 DI at 13.68% (+24 bps) are delivering a clear verdict: the swaps market is pricing a terminal Selic higher than the BCB’s guidance implies. This is not irrational panic — it is a rational repricing of a central bank that faces a genuine dilemma between credible inflation targeting (no cut) and political pressure (cut now). A hold or 25 bps cut combined with a hawkish statement would still be read as a BCB capitulation to Haddad’s political preference over inflation math.
Brent above $85 for more than one week rewrites the IPCA 2026 path — With IPCA-15 already at 4.10% approaching the 4.5% ceiling, and Brent now 16.5% higher than the pre-war close, the pass-through arithmetic becomes unforgiving. Goldman Sachs’ $110/bbl target would add an estimated 60–80 bps to IPCA on fuel pass-through alone. The BCB cannot responsibly cut rates into an active inflation shock of this magnitude without compromising its forward guidance credibility for 2027. Stagflation: weak jobs + sticky wages = Fed paralysis — Thursday’s Unit Labor Costs beat (+2.8% vs 2.0% consensus) set up the worst possible Friday outcome: NFP near 58K consensus (weak growth) combined with Average Hourly Earnings holding at +0.3% MoM / +3.7% YoY (persistent inflation). This stagflationary combination — simultaneous demand weakness and inflation stickiness — is the scenario the Fed has no clean answer for. It would prevent June cuts while simultaneously stoking recession fears, which is bad for EM risk assets from both directions. War escalation risk remains open-ended and asymmetric — Iran’s FM said Thursday the country sees “no reason to negotiate.” A new tanker attack was confirmed Thursday. Hezbollah involvement remains a risk flagged by analysts. The naval escort operation risks a direct confrontation with IRGC forces. Any one of these scenarios could move oil another 5–10% in a single session — a move the Ibovespa, now below 181,000, cannot absorb without testing the 200-day SMA at 174,487. |
Positioning BOTTOM LINE
Friday opens with a setup that is more constructive than any session this week — for the first time, two of three major catalysts point in the same direction. The Petrobras dividend beat (R$8.1B, 21% above consensus) drives first-hour buying in a name that represents nearly 8% of the Ibovespa. And with US Nonfarm Payrolls consensus at just 58K — the street’s own base case for a labor market cracking under DOGE layoffs and tariff headwinds — a weak print is the expected outcome, which would ease the dollar/yield squeeze that has been the primary mechanism of Brazil’s War Week pain. The risk is the tail, not the base: a Payrolls beat above 130K or a geopolitical escalation event would override both positives.
The structural positioning call remains: maintain overweight Petrobras and PRIO as oil hedges with fundamental support from dividends and elevated Brent. Reduce banks and rate-sensitive names — the DI curve is in active repricing and each session adds pressure. Vale is a complex picture: China’s 5% NPC growth target supports iron ore, but global risk-off continues to weigh on steel demand and the dollar headwind persists. The 179,895 intraday low from Thursday is the immediate floor; a conviction break opens the path to the 200-day SMA at 174,487 with minimal support between. The Ibovespa’s nearly 5% War Week decline from Monday’s close creates a meaningful recovery base if the dollar/yield complex finds relief today. Bias: long Petrobras at the open, constructive into Payrolls given the soft consensus, with asymmetric positioning for any geopolitical de-escalation through week’s end.