Triple Digits
Brent crude blew past $100 per barrel on Sunday for the first time since Russia’s 2022 invasion of Ukraine — and kept going. Futures touched ~$119.50 before pulling back toward ~$108 on a Financial Times report that G7 finance ministers will discuss a coordinated SPR release with the IEA today. Friday’s settlement was $92.69 (already +28% for the week), meaning the weekend added another ~16%.
The trigger: US-Israeli forces struck Tehran oil depots Saturday night. Iran named a new Supreme Leader. The IRGC retaliated by hitting US military facilities in the UAE and striking Saudi targets. War Day 10, no ceasefire channel, escalating rather than de-escalating. Trump dismissed SPR calls on Truth Social: “a very small price to pay.” JPMorgan’s $120–$130 worst-case Brent is no longer worst-case — it is the active range if G7 reserves fail to calm the market today.
Friday’s US Nonfarm Payrolls delivered a stagflationary shock. The economy shed 92,000 jobs in February (consensus: +59K) — the third monthly loss in five. Unemployment rose to 4.4%. Wages beat at +0.4% MoM / +3.8% YoY — weak jobs plus sticky wages, the worst possible combination. December was revised to −17K. Retail Sales fell 0.2%. The VIX exploded 24% to 29.49.
The S&P 500 fell 1.33% to 6,740, the Nasdaq shed 1.59% to 22,388, the Dow dropped 0.94% to 47,502 — all three now negative for 2026. Asia opened in free fall Monday: Nikkei −7%, KOSPI −8%, Hang Seng −3%. S&P futures are down ~1.7% pre-market.
The Ibovespa closed Friday at 179,364.82 (−0.61%), holding the 179,000 handle on thin volume of R$32.45 billion. Petrobras remains a tailwind (PETR4 +3.49% to R$42.11) but cannot offset systemic liquidation of this magnitude. The BCB Focus Survey at 07:25 BRT is the key domestic input: pre-war IPCA 2026 was 3.91%, Selic end-2026 at 12.00%. Any material upward revision formally prices out the March Copom cut.
The arithmetic is simple. War Week One cost the Ibovespa 4.99%. War Week Two opens with a likely 2–4% gap down, targeting the 200-day SMA at ~174,487. The only circuit breaker is a credible G7 SPR release or a geopolitical de-escalation headline. Without one, the Ibovespa prices toward the 200-day.
Three Things That Matter
| Weekend | Brent blows past $100, touches ~$119.50 before pulling back to ~$108 on G7 SPR release report. US-Israel strikes Tehran oil depots Saturday. Iran names new Supreme Leader; IRGC hits US facilities in UAE and Saudi targets. Trump rules out SPR: “very small price to pay.” War Day 10. Nikkei −7%, KOSPI −8%. S&P futures −1.7%. Dow futures −1,000 pts |
| Friday | US NFP: −92K (cons: +59K) — stagflationary shock. Unemployment 4.4%. Wages +0.4%/+3.8% (beat). Retail Sales −0.2%. December revised to −17K. Ibovespa −0.61% to 179,365. PETR4 +3.49% R$42.11 (post-earnings). Brent +8.52% to $92.69. S&P 500 −1.33% to 6,740. VIX +24% to 29.49. DXY 98.98 (−0.33%). 10Y 4.15%. USD/BRL ~R$5.2438. Week: Ibovespa −4.99%, Brent +28%, WTI +35% |
| Today | BCB Focus Survey (07:25 BRT) — first post-Hormuz. Previous: IPCA 2026 3.91%, Selic 12.00%. Critical input for Copom (T−9 days). G7 SPR discussion expected (Monday). German Factory Orders −11.1% (vs −4.2% cons). Sentix Investor Confidence (cons: −3.1, prev: +4.2). Mexico CPI (Feb). War Day 10 — Iran IRGC attacks spreading to Saudi Arabia and UAE |
Where We Left Off FRIDAY, MAR 6 — B3 CLOSE
The Ibovespa closed War Week One at 179,364.82, down 0.61% on Friday and 4.99% for the week — its worst five-session stretch since March 2025. Session range was tight (high 181,091, low 178,556), volume R$32.45 billion — neither capitulation nor conviction.
Petrobras was the session’s hero: PETR4 surged 3.49% to R$42.11 and PETR3 climbed 4.12% to R$45.78, both driven by Thursday night’s blowout earnings (full-year profit R$110.1 billion, Q4 dividends R$8.1 billion beating consensus by 21%). Without Petrobras, the index would have been materially lower.
The rest bled. Itaú −1.33% to R$42.93, Bradesco −1.41% to R$19.55, Vale to R$78.86, Ambev −0.39%. Banks and metals bore the brunt — sectors most exposed to DI repricing and global growth downturn. Braskem surged 30.34% for the week on Cade’s IG4 Capital approval, but its index weight is negligible.
In New York, the February payrolls report was an unambiguous shock. The economy lost 92,000 jobs — far worse than the already-soft +59K consensus. January was revised to +126K (from +130K); December was revised to −17K (from +48K). The US lost jobs in two of the last three months.
Healthcare lost 28,000 (Kaiser Permanente strike), manufacturing −12,000, transportation −11,000, federal government −10,000 (DOGE-driven decline of 330,000 federal jobs since October 2024). Average hourly earnings rose 0.4% MoM and 3.8% YoY — both above forecast — delivering the textbook stagflationary combination.
The S&P 500 fell 1.33% to 6,740, the Nasdaq dropped 1.59% to 22,388, the Dow lost 0.94% to 47,502. The VIX surged 24% to 29.49. The 10-year yield initially spiked on oil-driven inflation fears but reversed to close at 4.15% as recession risk dominated. The DXY fell 0.33% to 98.98. Fed Governor Waller suggested the data could justify a cut at the March FOMC, providing momentary bond relief before oil reasserted the inflation premium.
Market Snapshot DATA AS OF FRI, MAR 6 CLOSE
| Indicator | Close | Change |
|---|---|---|
| Ibovespa | 179,365 | −0.61% |
| USD/BRL | ~5.2438 | −0.69% |
| S&P 500 | 6,740 | −1.33% |
| Nasdaq | 22,388 | −1.59% |
| 10Y Treasury | 4.15% | +1 bp |
| Gold (Spot) | $5,172 | +1.83% |
| Brent Crude | $92.69 | +8.52% |
| Iron Ore (62%) | ~$111 | +2.90% |
| DXY | 98.98 | −0.33% |
What to Watch MONDAY CATALYSTS
One question dominates: can the G7 SPR release cap Brent below $100? The FT reported Sunday that G7 finance ministers will discuss a coordinated release with the IEA. The headline alone pulled Brent from ~$119.50 to ~$108. A credible announcement (50+ million barrels across Japan, Europe, and potentially the US) would establish a psychological ceiling. A delayed or vague response sends Brent toward $120–$130.
The weekend escalation was material: Tehran oil depots struck, new Supreme Leader named (continuity, not capitulation), IRGC attacks on US facilities in the UAE and Saudi Arabia. The war is spreading geographically — the path to $150 Brent that energy strategists flagged as tail risk.
The BCB Focus Survey at 07:25 BRT is the critical domestic event — the first compiled after the Hormuz blockade. Pre-war: IPCA 2026 at 3.91%, Selic end-2026 at 12.00%. If economists have repriced IPCA above 4.2%, the March Copom cut becomes mathematically unjustifiable. The DI curve was already delivering this verdict last Thursday (Jan/28 at 12.975%, Jan/35 at 13.68%).
Germany previewed the global manufacturing damage: January Factory Orders collapsed 11.1% (consensus: −4.2%), Industrial Production −0.5% (consensus: +1.0%). Europe’s largest economy is cracking before the oil shock’s full impact. Mexico CPI (08:00 BRT) matters for the IPC and Banxico. The CB Employment Trends Index (10:00 ET) and NY Fed Consumer Inflation Expectations (11:00 ET) will be parsed for stagflationary confirmation.
Ibovespa Setup TECHNICAL LEVELS
The Ibovespa closed Friday at 179,364.82 (−0.61%). Daily RSI reads 42.87 (MA: 61.73) — still neutral territory despite the fundamental shock. The 19-point RSI-MA gap confirms entrenched downside momentum. MACD remains deeply bearish at −1,877 (signal: 1,710). The 50-day SMA (~185,590) is overhead resistance. The 200-day SMA at ~174,487 is the structural floor and today’s active target.
Resistance: 179,365 (Friday’s close) → 181,091 (Friday’s high) → 183,000 (mid-week recovery zone) → 185,590 (50-day SMA).
Support: 178,556 (Friday’s low) → 176,144 (intermediate SMA cluster) → 174,487 (200-day SMA) → 170,000 (psychological, untested).
With S&P futures down ~1.7% and Brent at ~$108, expect a 2–4% gap down at the open, potentially testing 174,000–176,000 in the first hour. Petrobras provides a partial offset but cannot overcome systemic liquidation. The only scenario for early-session reversal is a credible G7 SPR announcement. Bias: defensive, targeting the 200-day SMA at 174,487.
Copom Watch NEXT MEETING: MAR 17-18 · T−9 DAYS
The Selic sits at 15.00% with 9 days to Copom. The question is no longer whether the BCB will cut — it is whether it needs to signal an emergency hold or even consider a hike. Brent closed Friday at $92.69 and is now above $108. The cumulative oil shock since the pre-war close exceeds 45%.
The pass-through arithmetic is unforgiving. Sustained Brent above $100 adds an estimated 100–150 basis points to annualized IPCA over 6 months through fuel, freight, food transport, and fertilizer inputs — even with partial absorption through Petrobras’ pricing formula.
The Focus Survey at 07:25 BRT is the test. Pre-war: IPCA 2026 at 3.91%, Selic end-2026 at 12.00%. The collection window likely captured the first days of the crisis but not Friday’s NFP or the weekend escalation. Any revision toward 4.1–4.2% IPCA signals the anchor is slipping. Above 4.5% — the tolerance band ceiling — the BCB loses all statistical cover for a March cut.
The DI curve was already delivering this message Thursday: Jan/28 at 12.975% (+19 bps), Jan/35 at 13.68% (+24 bps) in a single session. The curve will now likely price a hold with hawkish bias, and possibly a small probability of a 25 bps hike if oil stays above $100. The Copom statement will need to address not just March but the credibility of the entire 2026 easing cycle.
Economic Calendar MONDAY, MAR 9
| Time | Event | Impact |
|---|---|---|
| All Day | Iran-US War Day 10 — Tehran oil depots struck Saturday; Iran names new Supreme Leader; IRGC hits UAE and Saudi Arabia. Brent above $100. G7 discussing coordinated SPR release with IEA (FT report). Trump rejects SPR. War spreading geographically — worst-case scenario for oil supply | HIGH |
| 07:25 BRT | BCB Focus Market Readout — First post-Hormuz survey. Watch IPCA 2026 (prev: 3.91%) and Selic end-2026 (prev: 12.00%). Any material upward revision formally prices out the March Copom cut. IPCA above 4.5% would trigger emergency hold narrative | HIGH |
| 03:00 ET | German Factory Orders (Jan): Act −11.1% (cons: −4.2%, prev: +6.4%). German Industrial Production (Jan): Act −0.5% (cons: +1.0%). Already released — massive miss signals European manufacturing recession deepening pre-oil shock | MEDIUM |
| 05:30 ET | Eurozone Sentix Investor Confidence (Mar) — Cons: −3.1 (prev: +4.2). A swing from positive to negative territory would confirm the war-driven European sentiment collapse. Eurogroup Meetings also today | MEDIUM |
| 08:00 BRT | Mexico CPI (Feb, MoM/YoY) — Prev: +0.38% MoM / +3.79% YoY. Core prev: +0.60% MoM / +4.52% YoY. Any acceleration compounds the LatAm central bank dilemma amid oil shock. IPC index already at RSI 39.04 | MEDIUM |
| 10:00 ET | US CB Employment Trends Index (Feb) — Prev: 105.06. Leading indicator for labor market direction; a decline would reinforce the NFP −92K recession signal | LOW |
| 11:00 ET | US Consumer Inflation Expectations (Feb) — Prev: 3.1%. After $100+ oil and −92K payrolls, watch for a jump in consumer inflation expectations — critical for Fed psychology on the June cut baseline | MEDIUM |
| 11:30 ET | US 3-Month and 6-Month Bill Auctions — Watch bid-to-cover and tail for short-end demand; flight-to-quality flows should be strong given VIX at 29.49 and equity futures in free fall | LOW |
| MAR 11 | US CPI (Feb) — The next major inflation print. Pre-oil-shock data, but any above-consensus reading compounds the stagflation narrative before the FOMC meeting next week | HIGH |
| MAR 17–18 | Copom + FOMC Meetings — Both central banks decide same week. BCB now overwhelmingly likely to hold at 15.00% given oil shock. Fed faces stagflation dilemma: −92K jobs argues for cut, $100+ oil argues against | HIGH |
Latin America Markets FRIDAY CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 179,365 | −0.61% | 42.87 | Neutral |
| IPC (Mexico) | 67,314 | −1.56% | 39.04 | OS Watch |
| COLCAP (Colombia) | 2,175 | −0.32% | 35.64 | Oversold |
| IPSA (Chile) | 10,314 | +0.16% | 34.77 | Oversold |
| MERVAL (Argentina) | 2,626,115 | +2.15% | 35.65 | Oversold |
Four of five LatAm indices are now in or near oversold territory: IPSA 34.77, COLCAP 35.64, MERVAL 35.65, IPC 39.04. Only the Ibovespa (42.87) remains technically neutral — a distinction that will vanish after Monday’s gap-down.
The MERVAL’s 2.15% Friday bounce was short-covering — it will not survive the Asian liquidation wave. The COLCAP reversed from Thursday’s oil-beneficiary rally to −0.32%: even net oil exporters cannot outrun systemic risk-off when Brent moves 8–12% in a session. Chile’s IPSA (+0.16%, essentially flat) sits on its lower Bollinger Band, vulnerable to the global growth scare. Mexico’s IPC at RSI 39.04 reflects dual vulnerability: tariff uncertainty and imported oil inflation. Monday’s Mexico CPI will test whether Banxico’s December cut was premature.
Commodities & FX KEY MOVES
Brent settled Friday at $92.69 (+8.52%) — a 28% weekly gain, the largest since April 2020 — then detonated over the weekend. Futures touched ~$119.50 before pulling back to ~$108 on the G7 SPR headline. WTI surged to ~$113. Kuwait and Iraq had already begun production shutdowns Friday. JPMorgan warned cuts could approach 6 million bpd by end of next week. Qatar’s energy minister told the FT crude could reach $150. Trump ruled out US SPR participation.
Iron Ore traded around $111 at the DCE May contract, supported by China’s NPC 5% growth target. Headwinds from global recession risk and Germany’s factory orders collapse cap upside.
Gold closed Friday at ~$5,172. Structural support at $5,000–$5,100 holds with upside toward $5,400+ given VIX at 29.49, geopolitical escalation, and oil above $100.
USD/BRL closed the week near R$5.2438 — the real strengthened Friday as the DXY weakened 0.33% to 98.98 on recession fears. With oil above $100 Monday, the real is likely to weaken sharply toward R$5.35–5.40 on inflation pass-through fears and EM liquidation. BCB FX intervention pressure is mounting.
DXY at 98.98 is caught in cross-currents: recession-driven weakness versus safe-haven demand. Direction depends on whether markets price this as primarily a growth shock (dollar weakens) or inflation shock (dollar strengthens).
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| G7 SPR release could cap Brent below $100 — The FT report of G7/IEA coordination already pulled Brent from $119 to $108 on the headline alone. A credible announcement of 50–100 million barrels from Japan, Europe, and potentially the US would establish a psychological ceiling and give equity markets a multi-day reprieve. The 2022 precedent (180 million barrel IEA release during Russia-Ukraine) successfully capped Brent’s overshoot. Even without US participation, a Japan-Europe release of 30–40 million barrels would signal coordinated resolve.
Petrobras is a genuine structural beneficiary — With Brent now above $100 and Petrobras’ record export volumes (999K bpd in Q4), the company’s 2026 earnings are being repriced dramatically upward. PETR4 at R$42.11 is still trading at a significant discount to its Brent-implied valuation. The R$8.1 billion Q4 dividend beat was earned at $85 Brent — at $100+, the dividend and buyback capacity expands materially. Petrobras + PRIO represent ~10% of Ibovespa weight and provide a structural floor under the index. Oversold RSI across LatAm creates tactical bounce conditions — Four of five regional indices are at or near oversold on 14-day RSI. The Ibovespa at 42.87 will likely enter oversold territory today, joining IPSA, COLCAP, and MERVAL. Historically, synchronized LatAm oversold conditions of this magnitude have preceded 5–8% multi-session recoveries on any positive catalyst. Fed cut expectations have risen sharply — The −92K NFP print has moved Fed cut probability for July to nearly 48%, with September now fully priced. A faster Fed easing path — even without action at the March 17–18 FOMC — would structurally benefit EM assets by weakening the dollar and easing the yield complex. |
$100+ Brent rewrites the global macro equation — Triple-digit oil is not a temporary disruption — it is a regime change for inflation expectations, central bank policy paths, consumer spending capacity, and corporate margins globally. JPMorgan’s $120–$130 range is now the base case if the Strait remains closed beyond two weeks. Goldman Sachs warned Friday that $100+ is likely next week — and it arrived Sunday. The pass-through to IPCA, CPI, and every EM inflation target is mechanically inevitable. Central banks globally must choose between fighting recession and fighting inflation — they cannot do both.
US stagflation is confirmed, not theoretical — The −92K NFP with +0.4%/+3.8% wages is the textbook stagflationary print. December was also revised to negative. The average monthly job gain since Trump took office is below 5,000. This is not a soft landing — it is a labor market that is actively contracting while wages remain sticky. The Fed has no clean answer. A cut fuels inflation expectations further; a hold risks accelerating the recession. BCB March cut is effectively dead — The DI curve was already pricing a hold before the weekend. With Brent at $108 and the Focus Survey arriving this morning, the market will formally price out the entire first half of the easing cycle. The Selic at 15.00% combined with Brent above $100 creates the most restrictive effective monetary conditions since 2023. Rate-sensitive sectors (banks, homebuilders, retail) face continued de-rating. War is escalating, not de-escalating — Iran named a new Supreme Leader, the IRGC attacked Saudi Arabia and UAE, and the US responded with strikes on Tehran oil depots. The geographic spread of the conflict — now involving Saudi, UAE, and potentially Hezbollah — means the disruption is no longer isolated to the Strait. Insurance premiums for tankers in the entire Persian Gulf are becoming prohibitive, and even a ceasefire would take weeks to restore normal shipping. JPMorgan estimates 6 million bpd in production cuts by end of next week. |
Positioning BOTTOM LINE
Monday opens into a market environment that has shifted from correction to crisis. Brent above $100 — potentially above $110 by the time B3 opens — combined with the worst US payrolls print since the pandemic, a collapsing German industrial sector, and a war that is spreading rather than narrowing, creates a setup where the Ibovespa’s 200-day SMA at 174,487 becomes the active downside target. The only near-term circuit breaker is a credible G7 SPR release announcement, which the FT reported is being discussed today. If it comes — and if it is large enough to push Brent below $100 — the Ibovespa could stabilize in the 175,000–178,000 range and begin to build a base for recovery. If it doesn’t, or if Trump’s rejection of SPR release is the final word, the path to 170,000 opens with minimal structural support.
The positioning call is defensive with a single exception: Petrobras. PETR4 remains the only domestic name with both fundamental support (record earnings, dividend yield expanding with Brent) and mechanical tailwind (8% Ibovespa weight, oil above $100). Maintain maximum overweight Petrobras and PRIO. Reduce or exit banks, rate-sensitive names, and Vale until the DI curve stabilizes and the Focus Survey is digested. Vale’s iron ore support from China’s NPC is real but insufficient against the macro headwind of a synchronized global growth scare. The BCB Focus at 07:25 BRT will set the domestic tone: a benign print (IPCA still below 4.0%) would be constructive; a hawkish print (IPCA above 4.2%) would confirm the March cut is dead and add 50–100 bps of DI repricing. Bias: risk-off at the open with Petrobras as the sole long conviction, monitoring G7 SPR headlines for any intraday reversal signal.