Why does Brazil’s Ibovespa jump more than 2% on Tuesday

The Ibovespa rises strongly on Tuesday, recovering some of the losses of recent weeks. Around 12:15 p.m., the index shot up 2.40%, at 107,245 points.

On Wall Street:

Nasdaq was down 0.16%;
S&P 500 was up 0.022%;

In the United States, major indexes were little changed at Tuesday’s opening after the Bank of Japan surprised global investors with a monetary policy change that allows long-term interest rates to rise further.

Here in Brazil, markets monitor the Transition PEC, which is expected to be voted on today in the House of Representatives.

“There is a consensus that deputies should even present an amendment that can reduce the term of the PEC from 2 to 1 year, but keeping the amount of R$ 145 billion,” puts Luan Alves, chief analyst at VG Research.

In addition, the analyst says that investors see some names suggested for the economic team as positive, such as Nelson Barbosa at BNDES, because they are already known.

According to sources heard by Broadcast, Barbosa and former Minister of Social Development Tereza Campello should work, starting next year, at the state-owned company.

“The market is reacting to a prospect of dehydration of the Transition PEC in the House,” Fernando Bergallo, chief operating officer at FB Capital, told Reuters.

“So I see a strong inflow of investors into both the stock market and fixed income,” which helped boost the real, the specialist added.

Pedro Galdi, from Mirae Asset, follows the same line: the high is sustained by some names of the new team that were announced and how the PEC is being conducted.

Bruno Komura, from Ouro Preto Investimentos, argues that this may seem like noise, with the prospect of more spending, “but given all the pessimism we have seen recently, this seems reasonable and cheers the markets.