TODAY’S FOCUS
The Big Picture
The Strait of Hormuz crisis entered a dangerous new phase overnight. After Monday’s markets closed, Iran’s Islamic Revolutionary Guard Corps formally declared the waterway shut, warning it would fire on any vessel attempting to pass. At least five tankers have been damaged, two personnel killed, and approximately 150 ships are stranded on either side of the strait. Maersk, Hapag-Lloyd, CMA CGM, and MSC have all suspended transit. The de facto blockade of the passage through which 20% of global oil flows daily threatens the most severe energy supply shock since Russia’s invasion of Ukraine in 2022.
Monday’s session showed the Ibovespa’s unique resilience in an oil-shock environment. The index opened nearly 1% lower but reversed to close at 189,307 (+0.28%), shielded by Petrobras PETR4 (+4.58%) and PRIO (+5.12%) as Brent surged 6.68% to $77.74 — its highest close since January 2025. The dollar climbed 0.62% to R$5.1659, though it retreated sharply from an intraday peak of R$5.2146 as exporters sold into strength. The S&P 500 staged a similarly dramatic recovery, clawing back from −1.2% to close flat at 6,881.62.
Today’s tape will be dominated by the Hormuz escalation. With the IRGC’s overnight closure declaration, Brent futures are expected to gap higher toward $85–$90 in early Asian trading. Gold, which closed at $5,338 (+1.15%), could test the $5,400+ levels seen briefly on Monday. The domestic calendar is light — Brazil Trade Balance (Feb) is the main release — but geopolitical headlines will override any scheduled data. With the Copom meeting just 14 days away (March 17–18), the oil-driven inflation impulse adds a new dimension to the already complicated rate-cut calculus.
Three Things That Matter
| Overnight | IRGC formally declares Strait of Hormuz closed, threatens to fire on transiting vessels. Five tankers damaged, 150+ ships stranded. All major shipping companies suspend transit. Brent spiked to $82+ intraday Monday before settling at $77.74 (+6.68%). Goldman targets $110/bbl; JPMorgan sees $120–$130 if disruptions persist. Trump says operations will continue 4–5 weeks |
| Monday | Focus survey (pre-Iran) lowered year-end Selic to 12.0% from 12.13%, with March 17–18 cut to 14.5% still priced. IPCA steady at 3.91%. Dollar forecast dropped to R$5.42. ISM Manufacturing at 52.4 (vs 51.7 consensus), but prices paid sub-index surging. Key question: does the oil shock force a repricing of the entire easing cycle? |
| Today | Brazil Trade Balance (Feb) — early read on export flows. US Factory Orders (Jan). China Caixin Services PMI overnight — commodity demand signal. All subordinate to Hormuz headlines. Petrobras raising jet fuel prices 9.4% in March adds domestic inflation pressure |
Where We Left Off MONDAY, MAR 2 — B3 CLOSE
The Ibovespa opened nearly 1% lower as markets digested the US-Israel strikes on Iran but staged a dramatic reversal, closing at 189,307.02 (+0.28%). The recovery was almost entirely driven by Petrobras: PETR4 surged 4.58% to R$41.13 (highest since May 2024) and PETR3 gained 4.63% to R$44.71, as Brent crude spiked 6.68% to $77.74. PRIO led the gainers (+5.12% to R$57.28), while Braskem led decliners (−3.55% to R$9.25) on weak Q4 operational data. Vale slipped 0.71% and Itaú dropped 0.71% as the broader market absorbed risk-off. The session range was extreme: 186,637.98 to 190,110.43 — a 3,472-point swing.
The dollar climbed 0.62% to R$5.1659, hitting R$5.2146 intraday before exporters sold into the strength. In 2026, the dollar still shows a 5.9% decline against the real. In New York, the S&P 500 recovered from −1.2% to close at 6,881.62 (+0.04%), as investors bought megacap tech dips in Nvidia and Microsoft. The Nasdaq ended at 22,748.86 (+0.36%) after falling as much as 1.6%. The Dow slipped 73 points (−0.15%) to 48,904.78. The VIX jumped 5.48% to 20.95 — back above the 20 handle. Treasury yields whipsawed: the 10Y dipped to 3.93% before rebounding to close at 4.02%, a 5 bps gain from Friday, reflecting the inflation-vs-flight-to-safety tug-of-war. Gold surged 1.15% to $5,338 and briefly topped $5,400 on safe-haven demand.
Market Snapshot DATA AS OF MON, MAR 2 CLOSE
| Indicator | Close | Change |
|---|---|---|
| Ibovespa | 189,307 | +0.28% |
| USD/BRL | 5.1659 | +0.62% |
| S&P 500 | 6,882 | +0.04% |
| Nasdaq | 22,749 | +0.36% |
| 10Y Treasury | 4.02% | +5 bps |
| Gold (Spot) | $5,339 | +1.15% |
| Brent Crude | $77.74 | +6.68% |
| Iron Ore (62%) | $106.77 | +0.87% |
| DXY | 98.54 | +0.99% |
What to Watch TUESDAY CATALYSTS
Everything today is subordinate to the Hormuz crisis. The IRGC’s overnight declaration that the strait is “closed” and that any vessel attempting passage will be set ablaze represents a material escalation from Monday’s de facto disruption. At least five tankers have been damaged and approximately 150 ships sit anchored outside the strait. Maersk, Hapag-Lloyd, CMA CGM, and MSC have all suspended transits. If Brent gaps above $85 at the Asia open, expect the inflation repricing to intensify across all asset classes.
For Brazil, the oil spike continues to cut both ways. Petrobras is a direct beneficiary — PETR4 surged 4.58% on Monday and could extend gains if Brent sustains above $80. Petrobras is also raising jet fuel (QAV) prices 9.4% in March, adding a domestic inflation vector. But the broader market faces headwinds: Vale is exposed to iron ore weakness and global growth fears, banks will suffer from DI curve repricing, and consumer discretionary names face margin pressure from higher energy costs. The Iran ambassador to Brazil said he hopes the war will not interfere with fertilizer trade — a reminder that Iran supplies a meaningful share of Brazil’s agricultural inputs.
Monday’s ISM Manufacturing came in at 52.4 (vs 51.7 consensus), showing continued US expansion, but the prices paid sub-index is surging — a leading indicator of the oil-driven inflation that markets will now price in. OPEC+ agreed Sunday to raise output by only 206,000 bpd in April, well below the 411,000–548,000 bpd previously considered. Trump stated that the bombing campaign will continue 4–5 weeks. No diplomatic off-ramp is visible. Asian markets opened Monday down: Nikkei −1.35% to 58,057; Hang Seng −2.14% to 26,060.
Ibovespa Setup TECHNICAL LEVELS
The Ibovespa closed Monday at 189,307 after recovering from a 186,638 intraday low — a critical defense of the 186,600 support zone. RSI reads 69.04 on the fast line and 63.26 on the slow per the TradingView daily chart, approaching overbought but not extreme. Monday’s 3,472-point intraday range (186,638 to 190,110) was the widest since the October 2025 correction and reflects deeply uncertain positioning. The all-time high of 192,624 (Feb 25 intraday) feels distant in the current environment.
Resistance: 190,110 (Monday’s high) → 191,005 (Friday Feb 28 high) → 192,624 (ATH intraday). Support: 186,638 (Monday’s low — first test held) → 185,516 (Bollinger midline from chart) → 182,220 (50-day SMA zone). The Petrobras/oil correlation is now the dominant driver: as long as Brent holds above $75, PETR4’s 10%+ index weight provides a structural floor. A close below 186,000 would signal the geopolitical shock is overriding the bull trend and opens 180,000. Today expect another volatile range-bound session with Petrobras and energy names outperforming while banks and consumer discretionary lag.
Copom Watch NEXT MEETING: MAR 17-18
The Selic sits at 15.00% with the Copom meeting now 14 days away. Monday’s Focus survey — closed before the Iran strikes — lowered year-end Selic expectations to 12.0% from 12.13%, with a 50 bps cut to 14.5% still priced for March. IPCA expectations held at 3.91% for 2026, and the dollar forecast dropped to R$5.42. However, these projections do not yet incorporate the Hormuz crisis and its potential impact on energy prices.
The rate-cut thesis is under serious threat. The IPCA-15 already shocked at 0.84% (vs 0.57% consensus) with 12-month inflation at 4.10% — approaching the 4.5% ceiling of the tolerance band. Now the Hormuz closure threatens to add 30–50 bps to the inflation outlook via energy pass-through. If Brent sustains above $80 for more than two weeks, domestic fuel price adjustments become inevitable. The DI curve will reprice aggressively — the March cut may shrink from 50 bps to 25 bps, or potentially be delayed entirely. The BCB’s inflation projection of 3.4% for 2026 assumed much lower oil prices. The Copom’s own forward guidance stated it would “initiate monetary policy flexibilization at its next meeting, conditional on the expected scenario” — and the scenario has changed dramatically. Watch this week’s FX flows and next Monday’s Focus for early signs of repricing.
Economic Calendar TUESDAY, MAR 3
| Time (ET) | Event | Impact |
|---|---|---|
| 08:00 BRT | Brazil Trade Balance (Feb) — Export flows amid early Hormuz disruption | MEDIUM |
| 10:00 | US Factory Orders (Jan) — Manufacturing momentum check | LOW |
| All Day | Iran-US War — Hormuz closure, ongoing strikes, regional retaliation. Trump says 4–5 more weeks | HIGH |
| Evening | China Caixin Services PMI (Feb) — Commodity demand signal; iron ore implications | MEDIUM |
| WED | Brazil Industrial Production (Jan) | MEDIUM |
| FRI 08:30 | US Nonfarm Payrolls (Feb) — Key employment read amid war backdrop | HIGH |
| MAR 17–18 | Copom + FOMC Meetings — Both central banks decide same dates. First Selic cut expected (14.5%) | HIGH |
Latin America Markets LATEST CLOSE
| Index | Close | Change | RSI (14) | Signal |
|---|---|---|---|---|
| Ibovespa | 189,307 | +0.28% | 69.0 | Near OB |
| IPC | 70,585 | −1.15% | 61.5 | Neutral |
| COLCAP | 2,148 | −3.37% | 49.9 | Weak |
| IPSA | 10,549 | −3.02% | 44.3 | Weak |
| MERVAL | 2,603,094 | −1.48% | 39.3 | Bearish |
The Iran shock hit LatAm hard on Monday — Colombia’s COLCAP plunged 3.37% and Chile’s IPSA fell 3.02%, both sharply underperforming the Ibovespa. As net oil importers, Colombia and Chile are most exposed to sustained higher energy prices. Brazil’s oil-exporter status provided a unique cushion, allowing the Ibovespa to be the only major LatAm index to close in the green. Mexico’s IPC fell 1.15% on general risk-off, while Argentina’s MERVAL shed 1.48% as reform momentum stalled amid global turbulence. The RSI divergence between the Ibovespa (69) and the rest of LatAm (all sub-50) is the widest since the January rally began, highlighting Brazil’s structural outperformance driven by oil exposure and the Selic carry advantage.
Commodities & FX KEY MOVES
Brent surged 6.68% to $77.74 — the highest close since January 2025 — after hitting $82+ intraday. The IRGC’s overnight Hormuz closure declaration should push prices toward $85–$90 at the Asia open. Goldman Sachs targets $110/bbl if disruptions persist; JPMorgan sees $120–$130 in a worst case. OPEC+ agreed Sunday to raise output by only 206,000 bpd in April — token reassurance that won’t offset the 20% of global oil flowing through Hormuz. Gold climbed 1.15% to $5,339 and briefly touched $5,400+; the classic safe-haven bid is firmly in play and new highs toward the $5,589 ATH are within reach if the conflict persists. Iron ore rose modestly as the DCE May contract gained 0.87% to 754.5 yuan/mt on Middle East pellet supply fears, with the 62% CFR spot estimated near $106.8/mt. The commodity faces mixed signals — Chinese demand is steady ahead of the March NPC session, but Middle East pellet production (13% of global supply) is at risk. DXY surged 0.99% to 98.54 as the dollar caught safe-haven bids, though structurally it remains in a downtrend from its October 2025 peak above 108. USD/BRL rose 0.62% to 5.1659 after hitting 5.2146 intraday; exporters selling into strength limited the damage, and the real’s 5.9% YTD gain provides a buffer. The CDI at 14.90% maintains the carry advantage against capital flight.
Risk Map BULL vs BEAR
| Bull Case | Bear Case |
|---|---|
| Petrobras is the Ibovespa’s war hedge — Higher Brent directly boosts earnings, dividends, and fiscal contributions. PETR4 surged 4.58% Monday and could extend if oil sustains above $80. Brazil’s oil-exporter status turns a global crisis into a relative advantage among EMs.
Short-lived conflict precedent — The June 2025 Israel-Iran 12-day war spiked oil temporarily before a ceasefire crashed prices back. The S&P 500’s Monday recovery from −1.2% to flat shows dip-buying appetite remains strong. Markets historically shake off geopolitical shocks. Copom rate-cut cycle approaching — Focus shows Selic at 12% by year-end. Even if March cut shrinks to 25 bps, the direction is clear. Lower rates unlock equity multiple expansion and attract domestic flows. The Selic at 15% provides a powerful carry buffer against EM capital flight. February inflows provide structural cushion — Foreign capital poured R$15B+ into Brazilian equities in February alone. The Ibovespa’s bank- and commodity-heavy composition, rather than tech, insulates it from the AI disruption narrative hammering the Nasdaq. |
Hormuz closure = energy crisis — 20% of global oil flows through the strait. IRGC has fired on tankers and formally declared it closed. If sustained, Brent above $100 reignites global inflation and kills the rate-cut thesis everywhere. Goldman sees $110; JPMorgan $120–$130 worst case.
IPCA-15 shock + oil spike = double inflation hit — 0.84% vs 0.57% consensus already complicated the picture. 12-month IPCA at 4.10%, approaching the 4.5% ceiling. Oil pass-through from sustained Brent above $80 adds 30–50 bps. March Copom cut is at risk; terminal rate may reprice to 16%+. Global risk-off rotation reverses EM flows — Dollar surging on haven demand. Nikkei −1.35%, Hang Seng −2.14%. If foreign capital exits Brazilian equities, the YTD cushion erodes rapidly. VIX above 20 signals elevated fear. February’s 4.09% Ibovespa gain at risk of reversal. Escalation risk is open-ended — Iran struck UAE, Qatar, Bahrain, Saudi Arabia. Tankers attacked. Trump says 4–5 more weeks of bombing. Hezbollah involvement adds another front. No diplomatic off-ramp visible. Duration is the critical unknown. |
Positioning BOTTOM LINE
The Hormuz crisis has escalated overnight, and Tuesday’s session will test whether Monday’s Petrobras-driven resilience can hold against deepening global risk-off. The Ibovespa’s unique position as a major oil-weight EM index means it can outperform peers in an energy shock — Monday proved that, closing green while every other LatAm index bled red. But Brazil is not immune: the dollar’s 0.62% gain, the VIX above 20, and the threat to the Copom’s March rate cut all weigh against the bullish thesis. The critical variable remains duration. If this follows the 2025 twelve-day war pattern, the oil spike fades, the Copom cuts in March, and the underlying bull trend reasserts. If the Hormuz closure persists and Brent breaches $100, we are in a different macro regime — one where inflation expectations de-anchor, the DI curve reprices to 16%+, and the 2026 rally thesis needs wholesale revision. For today: expect a volatile session with another wide intraday range. Petrobras, PRIO, and oil-exposed names remain relative outperformers. Banks and consumer discretionary will lag. The 186,600 level is the line in the sand — Monday’s low held, and a close below opens 183,800 (50-day SMA) and eventually 180,000. Bias: defensive. Position for duration uncertainty, not direction conviction.