Brazil’s Morning Call for Thursday, March 19, 2026

Where We Left Off WEDNESDAY, MAR 18 — B3 CLOSE + AFTER-HOURS

The Ibovespa closed at 179,639.91 (−0.43%), oscillating between 181,551 (high) and 179,576 (low) in a session dominated by pre-decision caution. The index was already under pressure before the FOMC after US PPI shocked at +0.7% MoM — more than double consensus — confirming that inflation was accelerating even before the Iran oil shock hit.

After the B3 close, two events reshaped the outlook. The FOMC held rates as expected, but Powell’s tone was hawkish: inflation projections rose to 2.7% (from 2.4%), GDP growth was revised up to 2.4%, and the “bar for cutting rates” was raised. The Dow crashed 768 points — its worst day since the war began — with selling intensifying during the press conference.

Then the Copom cut 25 bps to 14.75%, as expected. The decision was unanimous. The statement left forward guidance open — no committed pace — and flagged the Middle East conflict as the dominant uncertainty. The BCB raised its 2026 inflation projection from 3.4% to 3.9%. As covered in yesterday’s Morning Call, the 25 bps cut was fully priced, so the domestic reaction hinges on the open guidance language and how the global selloff spills into B3.

Market Snapshot DATA AS OF WED, MAR 18 CLOSE

What to Watch THURSDAY CATALYSTS

Thursday is digestion day — and the global backdrop is ugly. The Ibovespa opens into a Dow that lost 768 points and an S&P that broke to new 2026 lows. The Copom’s 25 bps cut and open guidance provide mild domestic support, but cannot offset a hawkish Fed and scorching US inflation data.

Two more central banks decide today. The Bank of England at 08:00 ET (cons: hold 3.75%) matters for global rate sentiment — if the BoE sounds hawkish, it reinforces the “higher for longer” narrative. The ECB at 09:15 ET (cons: hold 2.15%) with Lagarde’s press conference at 09:45 ET provides the European view on the oil shock.

US data includes Initial Jobless Claims (08:30 ET, cons: 215K), the Philly Fed Manufacturing Index (08:30 ET, cons: 8.3, prev: 16.3), and New Home Sales (10:00 ET, cons: 722K). The Philly Fed matters most: a sharp decline from 16.3 would confirm the US manufacturing slowdown that the hot PPI is making more painful.

Overnight, the BoJ held at 0.75% as expected. War Day 20 — the conflict continues with no ceasefire progress despite the diplomatic signals earlier this week.

Ibovespa Setup TECHNICAL LEVELS

The Ibovespa closed Wednesday at 179,639.91 (−0.43%). Daily RSI reads 45.28 (MA: 48.95) — neutral territory, but fading. The MACD histogram remains deeply negative at −1,137.77 (MACD: 613.85, signal: −523.91), confirming bearish momentum persists.

Resistance: 179,640 (Wednesday’s close) → 180,507 (intermediate SMA) → 181,518 (50-day SMA) → 183,245 (upper Bollinger).

Support: 179,409 (lower SMA) → 176,341 (lower Bollinger) → 175,232 (200-day SMA) → 153,330 (long-term SMA).

The open will gap down to reflect the US selloff. Expect the index near 177,000–178,500 at the open. The 200-day SMA at ~175,232 is the critical floor — now just ~4,400 points below Wednesday’s close, but potentially only ~2,000–3,000 points below the opening print.

The Copom’s cut provides a domestic offset: the start of the easing cycle is structurally positive for equities. But the open guidance (no committed pace, war-dependent) limits the relief. If the B3 stabilizes above 177,000 by mid-morning, the Copom cut anchors sentiment. If it breaks below 176,341 (lower Bollinger), the 200-day SMA test becomes imminent. Bias: defensive, buy the dip only near the 200-day SMA.

Copom Watch DECISION DELIVERED · SELIC AT 14.75%

The BCB cut 25 bps to 14.75%. The vote was unanimous among seven directors — two seats remain vacant after mandates expired in late 2025.

The statement’s key line: the Copom “julgou apropriado dar início ao ciclo de calibração da política monetária” — judged it appropriate to begin the calibration cycle. It explicitly left future moves open, stating that “adjustments in the pace of this calibration, in light of new information, are possible.”

The BCB raised its 2026 inflation projection from 3.4% to 3.9% — approaching the 4.5% ceiling. The statement cited the Middle East conflict as the source of “considerably elevated uncertainty” and warned that inflation projections show “additional distancing from the target.”

The market read: the easing cycle has begun, but the pace is entirely war-dependent. A second 25 bps cut in May is the base case if oil stays near $100–105. If Brent breaks to $110+, a pause is on the table. The DI curve will reprice this morning alongside the US selloff.

Economic Calendar THURSDAY, MAR 19

Latin America Markets WEDNESDAY CLOSE

Wednesday’s LatAm session closed before the worst of the US carnage. The Ibovespa (−0.43%), IPC (−0.63%), COLCAP (−0.25%), and IPSA (−0.01%) all posted modest declines on pre-decision caution. The MERVAL was the outlier at +1.16%, continuing its short-covering bounce.

The IPC at RSI 36.27 is now the most oversold index in the region — its lowest reading since the war began. COLCAP at 38.92 is approaching extreme levels. The Ibovespa at 45.28 has room to fall further before hitting oversold territory. All five indices face significant gap-down risk this morning from the US selloff.

The MACD picture remains uniformly negative. The IPC’s histogram at −947.45 deepened further, and the MERVAL’s at −80,857.63 shows the bounce is still counter-trend. Today’s price action will determine whether the Copom cut provides enough domestic offset to prevent a full capitulation in the Ibovespa.

Commodities & FX KEY MOVES

Brent rose to ~$104, with Bloomberg reporting prices reaching ~$111 during the session after Iran said energy facilities came under attack. WTI traded near $98. The PPI’s +0.7% MoM reading confirmed that wholesale inflation is running hot even before the March oil spike fully hits the data.

Gold fell sharply to $4,770 (−1.00%), breaking well below the $5,000 level that held since the war began. The selloff accelerated after Powell’s hawkish tone strengthened the dollar and pushed real yields higher. Silver crashed 3.9% to $72.43. The precious metals rout signals that inflation fear is being replaced by rate-fear — a worse dynamic for risk assets.

USD/BRL rose to R$5.24 (+0.77%), reversing the prior two sessions’ declines as the hawkish Fed pushed the dollar higher globally. The Copom’s 25 bps cut adds modest downward pressure on the real through reduced carry, but the 14.75% Selic still offers an enormous yield differential. The real’s direction today depends on the DI curve’s reaction to the Copom statement.

DXY rose ~0.50% to ~100.0, reclaiming the key psychological level after Powell’s hawkish press conference. If the dollar holds above 100, it adds pressure to EM currencies and equities across the board.

Bitcoin fell 1.15% to $70,439, tracking the broader risk-off move. The crypto market is trading as a leveraged beta to equities in this environment.

Risk Map BULL vs BEAR

Positioning BOTTOM LINE