The Ibovespa dropped 1.01% on Friday, totaling a 1.38% decrease for the week. Strong US job data fueled this decline, hinting at unlikely early interest rate cuts.
Speculations suggest delays might push from May to June, causing market unrest.
The US added 353,000 jobs in January, surpassing the 180,000 forecast. This led to a 3.7% unemployment rate, better than the 3.8% expected.
Revisions added 126,000 jobs for the last two months, indicating a stronger economy.
Notably, December’s figures adjusted from 164,000 to 333,000 jobs. Wage growth in January doubled expectations, reaching 0.6%.
Consequently, the annual wage increase hit 4.5%. Average work hours dropped slightly, against the expectation of steadiness.
Post-report, US 10-year Treasury yields soared to 4.24%. Meanwhile, US stock indices, led by tech companies like Meta, ended higher.
This economic data suggests the Federal Reserve might postpone rate cuts.
Fed Chair Jerome Powell had already cooled March cut speculations, focusing on inflation concerns.
Strategist Gustavo Cruz believes this report eliminates March rate cut possibilities, perhaps delaying until June.
Such postponements could deter investments in emerging markets, including Brazil, influencing the local market negatively.
Morgan Stanley predicts the Fed will keep rates steady until June, with a continued focus on inflation and labor market tightness.
The firm expects inflation to decrease gradually over the next year, despite short-term pressures.
The robust US job market suggests a cautious approach from the Fed, especially given the strong service sector.
High US rates could shift capital away from emerging markets, affecting safer investments and explaining Ibovespa’s decline despite US stock gains.
The dollar’s rise against the real to R$ 4.968 ($1.00), marking a 1.18% weekly increase, reflects the broader implications of US monetary policy on global markets.