The First Exhale
Wednesday delivered the relief bounce that the charts demanded. The Ibovespa surged 1.24% to 185,366 — reclaiming the 50-day SMA zone (185,338) by a single session’s close, a technically significant recovery that proved the 180,518 intraday low from Tuesday was not a springboard for further collapse but a genuine capitulation point. Banks led the rebound. Brent pulled back from Tuesday’s $83.83 close to settle near $81.40, as Iran signaled indirect outreach to Washington via a third-party channel, and Treasury Secretary Bessent confirmed forthcoming measures to support Persian Gulf oil flows. This partial de-escalation was enough to unwind the worst of the DI curve repricing and restore confidence in the March Copom cut path — at least conditionally.
The war is not over. The conflict entered Day 6 on Thursday with Israel launching fresh strikes on Tehran overnight, Iranian drones reportedly targeting Saudi Arabia’s Ras Tanura loading terminal, and Hormuz remaining effectively closed to non-Iranian commercial traffic. The fundamental supply shock is unresolved. Wednesday’s equity recovery was driven primarily by (1) a New York Times report that Iran indirectly approached the US to discuss terms for ending the conflict, and (2) Broadcom’s after-hours earnings beat that propelled semiconductor sentiment. Both catalysts are fragile. The NYT report was quickly downplayed by US officials who expressed skepticism about the outreach. Broadcom’s beat does not affect Brazilian macro. The war premium in oil remains “firmly intact,” as Mizuho noted — the naval escort announcement only mitigates, not eliminates, the supply risk.
Thursday’s session is a data-heavy morning for Brazil and the US. Brazil’s unemployment rate for January prints at 07:00 BRT (consensus 5.4% vs prior 5.1%) — a potential surprise given Caged’s 112k beat on Tuesday. Brazil’s February trade balance prints at 13:00 BRT (consensus $4.23B vs prior $4.34B). In the US, the weekly jobless claims package (Initial: 215K cons; Continuing: 1,850K cons) arrives alongside the Q4 Nonfarm Productivity (cons: 1.9%) and Unit Labor Costs (cons: 2.0%) — the latter being particularly sensitive given the 10Y yield’s inflationary repricing. FOMC Member Bowman speaks at 13:15 ET. The ECB releases account of its last policy meeting at 07:30 ET and President Lagarde speaks at noon. The market structure for today: the Ibovespa needs to consolidate above 185,338 (50-day SMA) to validate Wednesday’s recovery as a trend change rather than a dead-cat bounce. A close below it on any negative Hormuz headline would re-test Tuesday’s 180,518 low rapidly.
Three Things That Matter
| Overnight | Iran drone strikes Ras Tanura (Saudi Arabia). Day 6 opens with no ceasefire. Iran-US indirect diplomatic channel reported via NYT — US officials express skepticism. Israel launches new strikes on Tehran. Brent ~$81.40 Wednesday close (off from $83.83). Dubai/Abu Dhabi reopened after 2-day closure: Dubai −4.9%, Abu Dhabi −3%+ |
| Wednesday | Ibovespa +1.24% to 185,366. Banks rebounded. S&P 500 +0.78% to 6,869. Nasdaq +1.29% to 22,807. Dow +0.49%. Broadcom beat after-hours. Bessent signals SPG oil flow support measures. USD/BRL closed ~R$5.264. Brent ~$81.40 (−2.9%). Gold partially rebounded. US ADP Feb: 77K (beat 48K consensus). ISM Services: 53.5 (in-line); prices sub-index eased |
| Today | Brazil Unemployment Rate (Jan, 07:00 BRT, cons 5.4%). Brazil Trade Balance Feb (13:00 BRT, cons $4.23B). US Initial Jobless Claims (08:30, cons 215K). US Q4 Unit Labor Costs (cons 2.0%) + Nonfarm Productivity (cons 1.9%). FOMC Bowman speaks (13:15 ET). ECB Lagarde speaks (12:00 ET). War Day 6: Ras Tanura attack overnight — watch Brent reaction at open |
Where We Left Off WEDNESDAY, MAR 4 — B3 CLOSE
Wednesday’s session brought the technical recovery that oversold conditions argued for. The Ibovespa closed at 185,366.44, a gain of 1.24% that recaptured the 50-day SMA zone breached so dramatically on Tuesday. The intraday range ran from 183,110 (open) to a high of 186,306 before settling. Banks, which led the Tuesday carnage, drove the Wednesday bounce: the sector rebounded broadly as DI futures eased following reports of Iranian diplomatic overtures and Bessent’s support-measures signal. Petrobras added modestly as Brent pulled off its recent highs but maintained an elevated floor. Volume was solid but below Tuesday’s emergency levels.
The dollar closed near R$5.264 — marginally below Tuesday’s R$5.26 close, consolidating rather than reversing. The BCB’s FX flow data released during the session confirmed that February recorded a positive total flow of US$5.43 billion, providing some structural support for the real even against the geopolitical headwind. In New York, the S&P 500 rose 0.78% to 6,869.50 and the Nasdaq climbed 1.29% to 22,807.48 — Micron and AMD each surged over 5%, Amazon gained 3.9%, and financials (KKR, Blackstone +3%) also bounced. The Dow added 238 points (+0.49%) to 48,739. Brent crude settled near $81.40, a decline of approximately 2.9% from Tuesday’s close, as the indirect Iran-US communication channel and Bessent’s comments allowed some oil premium to unwind. The 10Y Treasury yield edged slightly higher per CNBC commentary, remaining in the 4.10–4.12% range. Gold partially recovered from Tuesday’s liquidation selloff, stabilizing in the $5,150–5,200 area. VIX retreated from 23.57 but remained elevated in the 20–21 zone.
Market Snapshot DATA AS OF WED, MAR 4 CLOSE
| Indicator | Close | Change |
|---|---|---|
| Ibovespa | 185,366 | +1.24% |
| USD/BRL | 5.2640 | +0.08% |
| S&P 500 | 6,870 | +0.78% |
| Nasdaq | 22,807 | +1.29% |
| 10Y Treasury | 4.12% | +1 bp |
| Gold (Spot) | ~$5,175 | +~0.6% |
| Brent Crude | $81.40 | −2.90% |
| Iron Ore (62%) | ~$105.50 | −0.33% |
| DXY | ~98.80 | −0.27% |
What to Watch THURSDAY CATALYSTS
Thursday’s session opens with a critical ambiguity: Wednesday’s relief bounce proved the 180,518 floor was genuine, but an Iranian drone strike on Ras Tanura overnight reintroduces the tail risk that markets had briefly been willing to discount. Saudi Arabia’s Ras Tanura is the world’s largest crude oil terminal, processing roughly 7 million barrels per day. An effective strike on that infrastructure — as opposed to a symbolic one — would represent a profound escalation beyond the Hormuz closure narrative and potentially send Brent back above $84 before New York opens. Watch the initial Asian and European Brent reaction as the determining factor for the Ibovespa’s intraday direction. The Ibovespa chart needs to hold above 185,338 (50-day SMA) on a closing basis to validate Wednesday’s recovery. A sustained break above 186,600 would signal the market is beginning to look through the geopolitical shock.
For Brazil, Thursday’s domestic data docket is meaningful. The unemployment rate for January (07:00 BRT, consensus 5.4% vs December’s 5.1%) will be the first read on whether the labor market is beginning to show cracks under the Selic burden. A reading above 5.5% would send a dovish signal that partially offsets the inflationary oil shock and reinforces Haddad’s argument that the March cut should proceed. The February trade balance (13:00 BRT, consensus $4.23B) matters for BRL sentiment: a beat would signal commodity export resilience even as energy import costs rise. The BCB’s February FX flow data, released Wednesday, already confirmed a $5.43B positive flow for February — a structural anchor for the real even amid the current turbulence.
In the US, the weekly labor market pulse arrives at 08:30 ET: Initial Jobless Claims (215K consensus) and Continuing Claims (1,850K). Q4 Nonfarm Productivity (1.9% consensus) and Unit Labor Costs (2.0%) will be parsed for their implications for the Fed’s higher-for-longer stance. With the 10Y still near 4.12%, any upside surprise in unit labor costs would extend the yield repricing and pressure EM assets. FOMC Member Bowman speaks at 13:15 ET — her tone on the oil-inflation transmission will be closely watched. ECB President Lagarde speaks at 12:00 ET following the release of the ECB’s policy account at 07:30 ET; the ECB cut path is under its own stress from energy prices and any hawkish signal would compound EM selling pressure. Tomorrow’s US Nonfarm Payrolls (February) remains the terminal risk event for this week — a strong print on Friday would test whether Wednesday’s recovery has any structural legs.
Ibovespa Setup TECHNICAL LEVELS
Wednesday’s 1.24% recovery to 185,366 reestablished the index above its 50-day SMA (185,338), a psychologically and technically critical threshold. The RSI on the daily chart recovered to approximately 53.06 from Tuesday’s 49 — moving from neutral/oversold territory back to a mid-range reading, which is consistent with a relief bounce but does not yet signal an established uptrend. The chart visible at 07:39 UTC Thursday confirms the index has already opened around 185,366 with a slight positive lean (+1.24% from prior close). The MACD’s bearish cross from Tuesday has not yet reversed, meaning momentum confirmation of the Wednesday bounce will require additional follow-through. Volume on Wednesday normalized from the emergency levels of Tuesday’s R$46.8B to a more measured session, suggesting conviction on the buying side was genuine but not overwhelming.
Resistance: 186,306 (Wednesday’s intraday high) → 186,570 (prior resistance near recent highs on chart) → 189,307 (Monday’s close / psychological round). Support: 185,338 (50-day SMA — now just below, must hold on close) → 183,105 (Tuesday’s close / last major support level) → 181,153 (intermediate level visible on chart) → 180,518 (Tuesday’s intraday capitulation low — the structural floor). The critical scenario for Thursday: Brent pulls back on Ras Tanura damage assessment being limited → Ibovespa consolidates above 185,338 → builds toward 186,570 test. Adverse scenario: Ras Tanura strike confirmed as operationally significant → Brent spikes above $84 → Ibovespa loses 185,338 → re-tests 183,105 by midday. Bias: cautiously constructive above 185,338, defensive below it.
Copom Watch NEXT MEETING: MAR 17–18
The Selic sits at 15.00% with the Copom meeting now 12 days away. Wednesday’s market recovery and partial Brent pullback have restored some probability to the 50 bps cut scenario, though the balance of risk remains skewed toward 25 bps given the persistence of oil above $80 and the 10Y Treasury’s new equilibrium above 4.10%. Finance Minister Haddad’s explicit support for the March cut — stated twice in two days — carries significant political weight but cannot substitute for the BCB’s own inflation calculus. The IPCA-15 at 4.10% combined with Brent’s two-session 11%+ surge means the 12-month IPCA path for 2026 has materially shifted upward since the Copom’s last assessment.
The next major signpost is tomorrow’s US Nonfarm Payrolls (February), which will set the tone for Fed expectations and the 10Y yield into the Copom’s silent period. Next Monday’s Brazil Focus survey will be the first post-Hormuz projection set to enter the BCB’s analytical framework. If the Focus shows IPCA 2026 projections moving above 4.2%, the case for a 25 bps (versus 50 bps) cut becomes dominant. If Brent retreats toward $77–78 before Friday’s Payrolls, the 50 bps scenario recovers viability. The BCB’s “se confirmando o cenário esperado” language has proven flexible in the past — but it was written for a world where Brent was at $71, not $81. ADP’s 77K print on Wednesday (beating the 48K consensus) suggests the US labor market is still generating jobs, which complicates the Fed’s path and by extension EM positioning into the Copom decision.
Economic Calendar THURSDAY, MAR 5
| Time | Event | Impact |
|---|---|---|
| All Day | Iran-US War — Day 6. Iranian drone targeted Ras Tanura terminal overnight. Hormuz still effectively closed. Any diplomatic breakthrough or further escalation is market-dominant | HIGH |
| 07:00 BRT | Brazil Unemployment Rate (Jan) — Cons: 5.4% vs prior 5.1%. A miss above 5.5% supports dovish Copom case; a beat below consensus strengthens labor resilience narrative | HIGH |
| 07:30 ET | ECB Publishes Account of Monetary Policy Meeting — Context for Lagarde’s noon speech; any hawkish signal from energy-inflation concern weighs on EM positioning | MEDIUM |
| 07:30 ET | US Challenger Job Cuts (Feb) — Prev: 108.4K. Watch for geopolitical/energy-related layoff signals, particularly in transport and airlines | LOW |
| 08:30 ET | US Initial Jobless Claims (week) — Cons: 215K (prev: 212K). Continuing Claims cons: 1,850K. A material uptick would ease Fed hawkishness; steady reading keeps higher-for-longer intact | HIGH |
| 08:30 ET | US Q4 Nonfarm Productivity (cons: 1.9%, prev: 4.9%) + Unit Labor Costs (cons: 2.0%, prev: −1.9%) — ULC print is key: above 2.5% would reinforce 10Y yield push and compress EM carry trades | HIGH |
| 08:30 ET | US Import/Export Price Index (Jan) — Import cons: +0.3% MoM. Watch for oil pass-through in import prices; any surprise would extend inflation repricing | MEDIUM |
| 10:00 ET | US Factory Orders (Jan) — Prev: −0.7%. A second consecutive decline would add to growth-scare narrative; a bounce would partially offset | MEDIUM |
| 10:30 ET | US Natural Gas Storage (week) — Cons: −122B (prev: −52B). LNG disruptions from Hormuz/Qatar shutdown have elevated natgas globally; large draw would re-amplify energy inflation | MEDIUM |
| 12:00 ET | ECB President Lagarde Speaks — First major CB commentary post-Hormuz; her framing of oil’s inflation impact on Eurozone rate path could move global risk sentiment and EM flows | HIGH |
| 13:00 BRT | Brazil Trade Balance (Feb) — Cons: $4.23B (prev: $4.34B). Beat would signal export resilience and provide support to BRL; miss would add to current account deterioration concerns | MEDIUM |
| 13:15 ET | FOMC Member Bowman Speaks — Her stance on oil inflation and rate path is key; any pushback on near-term cuts would pressure 10Y yields and EM carry | HIGH |
| FRI 08:30 ET | US Nonfarm Payrolls (Feb) — The week’s terminal risk event. Strong print seals higher-for-longer Fed narrative and puts pressure on EM flows; weak print opens door for rate-cut rally | HIGH |
| MON MAR 9 | Brazil Focus Survey — First post-Hormuz IPCA and Selic projections. Market will price the cut size based on whether inflation expectations have shifted above 4.5% ceiling | HIGH |
| MAR 17–18 | Copom + FOMC Meetings — Cut size (25 vs 50 bps at Copom) depends on oil trajectory and Friday’s US payrolls read. Both central banks decide on the same dates | HIGH |
Latin America Markets WEDNESDAY CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 185,366 | +1.24% | 53.06 | Neutral |
| IPC (Mexico) | 70,428 | +2.91% | 52.50 | Neutral |
| COLCAP (Colombia) | 2,170 | +0.99% | 34.58 | OS Watch |
| IPSA (Chile) | 10,494 | +2.40% | 38.05 | Weak |
| MERVAL (Argentina) | 2,579,970 | −0.66% | 30.54 | Bearish |
Wednesday’s relief bounce was a regional phenomenon. Brazil’s Ibovespa (+1.24%) and Mexico’s IPC (+2.91%) led the recovery, with the IPC’s outsized gain reflecting the peso’s partial stabilization and technical rebound from deeply oversold territory — the RSI moved from 40.7 to 52.50, the most dramatic single-session RSI recovery in the region. Chile’s IPSA bounced +2.40% but the RSI remains at a fragile 38.05: the underlying picture is a brief reprieve from an oversold condition, not a trend reversal. Colombia’s COLCAP gained +0.99% but the RSI at 34.58 remains in warning territory; as a marginal net oil exporter it has been one of the region’s relative outperformers during the Hormuz shock, yet the structural downtrend in the index pre-dates the geopolitical event. Argentina’s MERVAL was the region’s outlier, declining another 0.66% with the RSI compressing further to 30.54 — the deepest bearish reading across LatAm markets. The MERVAL’s underperformance reflects a domestic dynamic: fading reform optimism and mounting fiscal concerns that the energy shock has amplified. With four of five LatAm indices still carrying RSI readings below 55 after Wednesday’s bounce, the regional recovery has technical room to continue but requires the geopolitical backdrop to stabilize. The Ras Tanura overnight attack tests that stabilization immediately at Thursday’s open.
Commodities & FX KEY MOVES
Brent pulled back to approximately $81.40 on Wednesday, a decline of roughly 2.9% from Tuesday’s $83.83 settlement, as the NYT report on Iranian diplomatic outreach and Treasury Secretary Bessent’s signal of forthcoming oil flow support measures allowed some war premium to unwind. Investing.com’s morning snapshot on Thursday shows Brent opening in the $80.32–$84.47 range, with the previous close at $81.40 — the Ras Tanura drone strike news will determine whether the day’s trading gravitates toward the top or bottom of that range. The structural floor for Brent has shifted upward: even with partial de-escalation, the Strait of Hormuz remains functionally closed to commercial traffic, and Mizuho has explicitly stated the war premium “remains firmly intact.” Goldman’s $110 target and Barclays’ $100 scenario are still analytically in-play. Gold partially recovered from Tuesday’s liquidation selloff, stabilizing in the $5,150–5,200 range as the safe-haven bid partially reasserted following the Ras Tanura news overnight. The structural geopolitical bid remains fully intact; Tuesday’s drop was a portfolio-rebalancing event, not a trend reversal. Iron ore continued its soft drift near $105.50, reflecting the market’s concern that a sustained energy-driven global slowdown reduces Chinese steel demand even as the DCE May contract faces freight cost pressures from the Hormuz disruption. DXY eased slightly to approximately 98.80 as the partial oil pullback reduced the inflation-premium dollar bid, though the index remains above 98 and structurally supported. USD/BRL consolidated near R$5.264 — the BCB’s February FX flow data confirmed a $5.43B positive inflow for the month, providing a structural buffer. The real needs Brent to stay below $84 and Payrolls on Friday to not shock in order to recover meaningfully toward the pre-crisis R$5.10–5.15 range.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| Diplomatic channel opens war’s exit — Iran’s indirect approach to Washington via a third-party channel, even if downplayed by US officials, is the first substantive signal that both sides recognize the economic costs. Any follow-on reporting of formal talks would trigger a rapid Brent pullback and Ibovespa relief rally far beyond Wednesday’s 1.24%.
Ras Tanura damage contained — If the overnight drone strike on Saudi Arabia’s Ras Tanura terminal proves symbolic rather than operationally damaging (Saudi Aramco has extensive redundancy), the market may interpret the escalation as Iran’s final aggressive card before negotiation — net bullish. The pattern from June 2025 suggests markets price in resolution faster than the conflict appears to justify. Labor data provides Copom cover — Brazil’s unemployment print (Thursday 07:00 BRT) could beat in the bearish direction — a reading above 5.4% with softening Caged sub-components would give the BCB additional justification for a 50 bps cut framing rather than the hawkish 25 bps that markets have been pricing. 50-day SMA reclaimed — Wednesday’s close above 185,338 is a technical signal that the market absorbed Monday and Tuesday’s geopolitical shock and found a new equilibrium. RSI recovery from 49 to 53 in one session is a breadth confirmation. A follow-through close above 186,570 on Thursday sets up a test of 189,307. |
Ras Tanura strike is a structural escalation — Saudi Arabia’s Ras Tanura terminal processes approximately 7 million barrels per day. Any meaningful operational disruption — beyond the drone itself — would represent an order-of-magnitude escalation beyond Hormuz, bringing $100 oil into the immediate-term scenario rather than a tail risk. UAE’s Dubai/Abu Dhabi markets fell 4.9% and 3%+ on reopening Wednesday — the Gulf is pricing real damage.
Diplomatic outreach was premature to price — US officials explicitly called Iranian overtures “skeptical” on Wednesday. Markets that rallied on that news are vulnerable to a sharp reversal if Thursday’s diplomatic reporting indicates the channel was a deception or a delay tactic rather than a genuine off-ramp. Geopolitical news has proven to be the primary volatility driver all week with zero structural resolution. Unit Labor Costs print surprises high — Q4 ULC consensus is 2.0% but the prior reading was −1.9% and there is significant uncertainty. A print of 2.5%+ would push the 10Y above 4.20% and reset the EM carry calculus, forcing a re-test of Tuesday’s Ibovespa lows. ADP’s 77K beat on Wednesday suggests the US labor market is hot enough to generate wage pressure. MERVAL’s continued weakness signals EM contagion — Argentina’s MERVAL declining again Wednesday (−0.66%, RSI 30.54) despite the regional relief bounce signals ongoing EM-specific risk beyond the Hormuz shock. If Argentina’s credit stress bleeds into broader EM sentiment, Brazil faces dual headwinds of geopolitical oil pricing and EM risk premium expansion simultaneously. |
Positioning BOTTOM LINE
Wednesday proved something important: the Ibovespa’s structural support at 180,518 was genuine. The 1.24% recovery recaptured the 50-day SMA and the RSI moved back to 53 — enough to declare the panic phase technically over, provided the geopolitical news does not deteriorate further. But “panic phase over” is not the same as “bull trend restored.” The war is still active, Brent is still $10 above pre-conflict levels, and the 10Y Treasury has not retreated from its new 4.10%+ equilibrium.
The Ras Tanura overnight attack is Thursday’s first test of whether Wednesday’s recovery was durable or premature. If the damage assessment proves limited and Brent opens below $82, the session has upside toward 186,570. If the attack proves operationally significant and Brent pushes above $84, expect an immediate re-test of the 185,338 SMA with 183,105 (Tuesday’s close) as the next stop. For positioning: maintain the overweight in Petrobras and PRIO as the war hedge that works in both the escalation and the high-price-as-new-normal scenarios. Bank names remain a conditional recovery trade — appropriate if the Copom path stabilizes toward 50 bps, not yet if 25 bps is the operating assumption. Vale is a growth-sensitive position in a growth-uncertain world: not a conviction add. The BRL needs the Payrolls print on Friday to not shock and Brent to hold below $84 to recover meaningfully. Bias: conditionally constructive above 185,338, with Friday’s Payrolls as the week’s definitive directional catalyst.