Dollar drops to 5.11 reais and Ibovespa reduces gains

The Ibovespa (IBOV) started business on Tuesday (1) high, but slowing down, following the excellent mood abroad amid the season of corporate results, de-escalation of the zero covid policy in China, as well as waiting for the Federal Reserve’s monetary policy decision.

Tomorrow, the Brazilian stock market will be closed for the holiday.

In the first trading session of the month, reactions to the outcome of the presidential election in Brazil continue to dictate the news, amid protests in the country, with protesters disrupting the movement of cars, buses, and trucks in at least 25 states, according to information from the Federal Highway Police (PRF) to the Agência Brasil.

Around 11 am (Brasília time), the Ibovespa was advancing 0.11%, after going close to 1.3% in another day of gains for papers linked to consumption and education.

The shares of Petrobras, which closed the previous trading session down by up to 8.5%, are trading up by up to 1.3% this morning.

The same goes for Banco do Brasil, which advances 1.1% on the B3.

Still, on the domestic scene, the Central Bank released the minutes of the last meeting of the Monetary Policy Committee (Copom), which kept the Selic unchanged at 13.75% per year.

The document reiterates the message published after the decision to maintain interest rates at the current level for extended periods.

Overseas, U.S.-listed Chinese stocks soared in pre-market trading, tracking the rally in Chinese markets after an unverified social media post sparked speculation that Beijing may be trying to eliminate restrictions, even as the country’s Foreign Ministry said it was unaware of such a plan.

Attention is still on the agenda for the Federal Open Market Committee (FOMC) meeting, which decides tomorrow (2) the direction of interest rates in the United States.

The swap markets are pricing in a 75 basis points increase amid the Fed’s most aggressive tightening campaign in four decades.

Still, strategists like Marko Kolanovic of JPMorgan (JPM) believe that the Fed’s aggressive rate hike is ending, offering relief for the markets.

The U.S. will likely raise rates by 50 basis points in December and pause after another 25 basis point hike in the first quarter, he told Bloomberg News.