TODAY’S FOCUS
The Big Picture
Markets open March under the shadow of war. On Saturday, February 28, the United States and Israel launched joint military strikes on Iran — “Operation Epic Fury” — killing Supreme Leader Ayatollah Ali Khamenei in a targeted strike on his Tehran compound, along with dozens of senior military and IRGC commanders. Iran retaliated within hours, launching missiles and drones at Israel, the UAE, Qatar, Kuwait, Bahrain, Jordan, and Saudi Arabia.
The Strait of Hormuz — through which 20% of global oil flows daily — has effectively shut down as shipping companies halt transit. Sunday evening futures show Brent crude surging ~8% to $78.78/bbl, Dow futures down 375 points (−0.77%), S&P futures −0.74%, Nasdaq futures −0.85%. Gold futures jumped 1.6%. The dollar surged on haven demand.
For Brazil, the calculus is complex. Higher oil benefits Petrobras and supports the fiscal outlook, but a global risk-off rotation hammers EM equities and could reverse the R$41.6B YTD foreign inflow trend. The Ibovespa closed February at 188,787 (+4.09% for the month), and now faces its most challenging open since the October 2025 correction. Today’s macro slate: BCB Focus survey (06:25), Brazil manufacturing PMI (08:00), ISM Manufacturing (10:00).
Three Things That Matter
| Weekend | US-Israel strikes kill Iran’s Khamenei. Iran retaliates across the region. Strait of Hormuz effectively closed. Brent spikes 8% to ~$79. Three US service members killed. Trump says operations “ahead of schedule” but warns of more casualties. Congress preparing war powers resolution |
| 06:25 | BCB Focus Market Readout — First post-IPCA-15 consensus. February IPCA-15 came in at +0.84% (vs +0.57% expected), 12-month at 4.10%. Markets will watch whether 2026 IPCA expectations break above 4.00% for the first time, which would pressure Copom’s March 17-18 decision |
| 10:00 | ISM Manufacturing PMI (Feb) — Consensus 51.7 vs prior 52.6. Any contraction reading would compound war fears with growth anxiety. ISM Prices Paid sub-index (consensus 60.6) critical for inflation outlook given oil spike |
Where We Left Off FRIDAY, FEB 27 — B3 CLOSE
The Ibovespa fell 1.16% to 188,787 on Friday after the IPCA-15 printed 0.84% — 27 basis points above the 0.57% consensus — erasing hopes of an imminent Copom rate cut. Education (+5.20%) and Transport (+1.72%) were the main inflation drivers. Session leaders included PRIO (+4.11%) while Cosan (−5.27%) led decliners. The index touched a high of 191,005 and low of 188,478 on elevated volume of R$35.6B. For February, the Ibovespa gained 4.09% — its seventh consecutive positive month. For the week, it declined 0.92%.
In New York, the S&P 500 fell 0.43% to 6,879 and the Nasdaq dropped 0.92% to 22,668 as hot PPI data added to sticky inflation fears. The Dow plunged 521 points (−1.05%) to 48,978, with American Express (−7.9%) and Goldman Sachs (−7.5%) leading losses on private credit contagion fears. Block announced 4,000+ layoffs and CoreWeave sank 18.6% on weak guidance — amplifying the AI disruption narrative that has hammered the tech-software sector (IGV −10% for February). Nvidia fell another 4.1%. Gold rose 1.03% to $5,248 and Brent surged 2.9% to $72.87 on pre-strike positioning. The DXY slipped to 97.57.
Market Snapshot DATA AS OF FRI, FEB 27 CLOSE
| Indicator | Close | Change |
|---|---|---|
| Ibovespa | 188,787 | −1.16% |
| USD/BRL | 5.1344 | −0.09% |
| S&P 500 | 6,879 | −0.43% |
| Nasdaq | 22,668 | −0.92% |
| 10Y Treasury | 3.97% | −5 bps |
| Gold (Spot) | $5,248 | +1.03% |
| Brent Crude | $72.87 | +2.87% |
| Iron Ore (62%) | $105.85 | −0.98% |
| DXY | 97.57 | −0.17% |
What to Watch MONDAY CATALYSTS
Everything today is subordinate to the Iran crisis. The market must price in three unknowns simultaneously: the duration of the military campaign (Trump said bombing will continue “as long as necessary”), the severity of the Hormuz disruption (the IRGC has reportedly fired on three oil tankers), and whether Iranian retaliation escalates further (strikes have hit Dubai, Abu Dhabi, Doha, Bahrain, and Tel Aviv). UBS warned that a material Hormuz disruption could send Brent above $120/bbl. Goldman Sachs noted that only a “severe and sustained” oil disruption would fundamentally damage the global growth picture, but cyclical sectors could bear the brunt near-term.
For Brazil specifically, the oil spike is a double-edged sword. Petrobras benefits directly from higher crude — its break-even is well below $50/bbl — and energy sector earnings estimates will be revised upward. But an oil-driven inflation impulse complicates the Copom narrative: the IPCA-15 already shocked at 0.84% versus 0.57% consensus, and now energy costs are spiking. The DI curve will reprice aggressively, likely pushing terminal rate expectations back above 16%. The real, which closed February at a 21-month high of 5.1344, faces pressure from a surging dollar and potential EM outflows.
OPEC+ held an emergency meeting Sunday and agreed to a modest 206,000 bpd increase — token reassurance that won’t offset the risk to Iranian production (4.7M bpd, 4.4% of global supply) or the Hormuz freeze. Congress is preparing a war powers resolution, but Trump is expected to veto it. The Brazil government condemned the strikes and called for international law adherence. Asian markets opened Monday in the red: Nikkei −1.2%, Hang Seng −1.15%.
Ibovespa Setup TECHNICAL LEVELS
The Ibovespa enters March at 188,787 after Friday’s 1.16% decline on the IPCA-15 shock. The index was already showing fatigue — rejected at 192K twice, RSI cooling from 72 to 69.5 — and now faces a geopolitical gap-down. The intraday ATH at 192,624 (Feb 26) feels distant. Friday’s R$35.6B volume reflected month-end Ptax flows, not conviction buying. With US S&P futures down 0.74%, European futures down 1.7%, and Asian markets falling 1-1.6%, expect the Ibovespa to open sharply lower.
Resistance: 190,419 (prior session low, now overhead) → 191,005 (Friday’s high) → 192,624 (ATH intraday). Support: 188,478 (Friday low) → 186,616 (Bollinger midline from chart) → 183,797 (50-day SMA zone). RSI: 69.5 on the daily — still elevated but about to get reset lower by the gap-down. MACD histogram at −474, momentum already negative. A close below 186,000 would signal a deeper correction toward 180,000. Petrobras and Vale will diverge: oil benefits PETR4, but risk-off and iron ore weakness pressure VALE3. Banks will likely follow the broader EM selloff.
Copom Watch NEXT MEETING: MAR 17-18
The Selic sits at 15.00% with the Copom meeting now just 15 days away. The rate-cut thesis that was gaining momentum two weeks ago has been torpedoed by two developments: Friday’s IPCA-15 at 0.84% (vs 0.57% consensus), with 12-month inflation at 4.10% — approaching the 4.5% ceiling of the tolerance band — and now the Iran crisis that threatens to spike oil prices 20-40% from Friday’s close. If Brent sustains above $80/bbl, domestic fuel price adjustments become inevitable, adding 30-50 bps to the inflation outlook.
Today’s Focus survey (06:25) will be the first official consensus after the IPCA-15 shock but before the Iran strikes — expect 2026 IPCA expectations to rise above 4.00% for the first time. The DI curve was already pricing a hold in March; the geopolitical premium will extend the hold and push terminal rate expectations back toward 16.00-16.50%. The CDI at 14.90% provides carry support for the real, but that shield weakens if global risk-off triggers forced EM selling. The Copom faces a uniquely difficult meeting: cut into an inflation shock and a war, or hold and risk overtightening an economy showing signs of cooling activity.
Economic Calendar MONDAY, MAR 2
| Time (ET) | Event | Impact |
|---|---|---|
| 06:25 | BCB Focus Market Readout — First post-IPCA-15 consensus survey | HIGH |
| 08:00 | Brazil S&P Global Manufacturing PMI (Feb) — Prior: 47.0 (contraction) | MEDIUM |
| 09:00 | ECB President Lagarde Speaks | MEDIUM |
| 10:00 | ISM Manufacturing PMI (Feb) — Cons: 51.7 vs prior 52.6. Prices Paid: 60.6 | HIGH |
| All Day | Iran-US War — Ongoing strikes, Hormuz closure, regional retaliation | HIGH |
| FRI 08:30 | U.S. Nonfarm Payrolls (Feb) — Key employment read amid war backdrop | HIGH |
| MAR 17–18 | Copom + FOMC Meetings — Both central banks decide same dates | HIGH |
Latin America Markets LATEST CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 188,787 | −1.16% | 69.5 | Bullish |
| IPC | 71,406 | +0.02% | 62.4 | Bullish |
| COLCAP | 2,223 | −2.67% | 36.4 | Bearish |
| IPSA | 10,878 | −1.56% | 45.0 | Neutral |
| MERVAL | 2,642,105 | −4.08% | 40.1 | Bearish |
Friday was brutal across the region — every index except Mexico’s IPC (flat at +0.02%) closed in the red. Colombia’s COLCAP plunged 2.67% with RSI collapsing to 36.4, firmly in bearish territory and approaching oversold. Argentina’s MERVAL dropped 4.08%, extending its decline to over 15% from the January peak, with RSI at 40.1. Chile’s IPSA fell 1.56% to 10,878, sliding into neutral territory with RSI at 45.0. These pre-war declines set a fragile baseline — expect Monday to amplify the damage. Oil-exposed names (Ecopetrol in Colombia, YPF in Argentina) may outperform their indices, while banking and consumer sectors face the heaviest pressure from the global risk-off rotation.
Commodities & FX KEY MOVES
Brent closed Friday at $72.87 (+2.87%) but Sunday evening futures surged ~8% to $78.78 as the Hormuz closure materialized. Analysts warn $100+ if the strait remains blocked — UBS sees $120 in a worst case. OPEC+‘s emergency 206K bpd increase is symbolic, not material. Gold closed at $5,248 (+1.03%) Friday and futures jumped another 1.6% Sunday — expect a push toward new highs as haven demand intensifies. Iron ore slipped to $105.85 (−0.98%) as Chinese demand weakened ahead of the March 5 parliamentary session; the war adds uncertainty but iron ore is less directly exposed than energy commodities. DXY was at 97.57 Friday but surged overnight on haven demand — a stronger dollar puts pressure on all EM currencies. The USD/BRL closed at 5.1344 Friday after February’s 2.17% decline, but expect a reversal as the dollar strengthens and risk-off flows drain EM equities. Bitcoin faces dual headwinds from risk-off sentiment and the broader crypto-correlated-to-Nasdaq sell thesis.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| Petrobras is the Ibovespa’s war hedge — Higher Brent directly boosts earnings, dividends, and the fiscal contribution. PETR4 could outperform the index materially if oil sustains above $80.
Short-lived conflict precedent — The 2025 Israel-Iran 12-day war spiked oil temporarily before a ceasefire crashed it. Goldman Sachs maintains S&P 7,500 year-end target. Wells Fargo says this is a tail risk, not base case. R$41.6B YTD foreign inflows provide buffer — Brazil’s carry advantage (Selic 15% vs US 4.5%) is intact. The Ibovespa is bank- and commodity-heavy, not tech-heavy — structural insulation from the AI selloff narrative. Record buyback authorizations — $233.3B in US corporate buybacks authorized in February provides a floor for large-cap names during the selloff. |
Hormuz closure = energy crisis — 20% of global oil flows through the strait. Iran has fired on tankers. If sustained, oil above $100 reignites global inflation and kills the rate-cut thesis everywhere. BCB forced to hold or even hike.
IPCA-15 shock + oil spike = double inflation hit — 0.84% vs 0.57% consensus. 12-month at 4.10%, approaching the target ceiling. Oil pass-through adds 30-50 bps. Copom March rate cut is dead; terminal rate reprices to 16%+. Global risk-off rotation reverses EM flows — Dollar surging on haven demand. Asian markets falling 1-2%. If foreign capital exits Brazilian equities, the R$41.6B YTD cushion erodes rapidly. February’s 4.09% Ibovespa gain at risk. Escalation risk is open-ended — Hezbollah joined the conflict. Iran struck UAE, Qatar, Bahrain. Three US service members killed. Trump warned of more casualties. Congress debating war powers. No off-ramp visible. |
Positioning BOTTOM LINE
This is a regime-change session — for Iran and for markets. The Ibovespa enters March having gained 4.09% in February and 17.17% YTD, but now faces a geopolitical shock that resets the risk calculus entirely. The immediate impact is unambiguously negative: global risk-off, dollar surging, EM under pressure, DI curve repricing hawkish, and the Copom rate-cut narrative effectively shelved. But Brazil is better positioned than most EMs for an oil shock — Petrobras is a direct beneficiary, the fiscal framework is bolstered by energy revenues, and the Selic at 15% provides a carry buffer against capital flight. The critical variable is duration: if this follows the 2025 twelve-day war pattern, the damage is temporary and the underlying bullish thesis (foreign inflows, BRL strength, falling inflation expectations) reasserts itself. If the Hormuz closure persists and oil breaches $100, we’re in a different macro regime entirely. For today: expect a gap-down to the 186,000-188,000 range. Petrobras and energy names will be relative outperformers. Banks and consumer discretionary will lag. The 183,800 level (50-day SMA) is the critical support — a close below opens 180,000. Bias: defensive. This is not a day to add risk.