The presence of the Minister of Finance, Fernando Haddad, the vice-president, Geraldo Alckmin, and the president of France, Emmanuel Macron, at the Brazil-France Economic Forum, at Fiesp, in São Paulo, will be watched by investors this Wednesday. Macron and President Luiz Inácio Lula da Silva launch a new submarine in Itaguaí, Rio de Janeiro, where the machine was built with French technological cooperation. The director of Regulation of the Central Bank, Otavio Damaso, and the member of the European Central Bank (ECB), Frank Elderson, also participate in an event on Climate-related Financial Risks, in Rio de Janeiro, and the director of Monetary Policy at the BC, Gabriel Galípolo, teaches at Unicamp. On the indicator agenda, the IGP-M for March and the Caged for February are the highlights, in addition to the publication of several balance sheets for the 4th quarter at the end of the day. Without relevant data in the US, markets are waiting for a webinar from Federal Reserve director Christopher Waller.
Exterior
Markets are undergoing fine adjustments with an eye on corporate news amid the weak agenda in the US. Expectations revolve around the important consumer spending price index (PCE), the American Central Bank’s preferred inflation measure, and a speech by Federal Reserve President Jerome Powell this Friday. Future indices in New York and Treasury interest rates show short winds, while the dollar oscillates close to stability. The American currency fell against the Japanese yen, which is recovering after reaching its weakest level in 34 years amid dwindling hopes that the Bank of Japan (BoJ) may raise its base interest rate again, after withdrawing it from negative level last week. In Europe, the signals are mixed on the stock markets, with investors eyeing the drop in oil, the 3.53% decline in iron ore in China and echoing economic sentiment data from the euro zone pointing to a slight improvement in March. In Sweden, the Central Bank decided to maintain its basic interest rate at 4%, but said it could start reducing the rate in May or June if the “inflation outlook remains favorable”. In China, industrial profit expanded 10.2% annually in the first two months of 2024, after falling 2.3% in the whole of last year, but took a backseat on the stock markets, which were pressured by technology shares.
Brazil
Persistent declines in oil and iron ore should weigh on the local stock market, although positive signs in New York may ease. Investors should review Caged data and various balance sheets from the meatpacking and retail sectors, such as JBS and CVC.
Yesterday, after the Copom minutes, the market remained divided on the next steps of monetary policy. The document linked the definition of the rhythm and terminal interest rate to the evolution of data from the domestic and global economy. Despite the low incidence of revisions in the official scenarios, however, agents’ perception increased about the possibility of reducing the pace of cuts to 0.25 percentage points at the June meeting.
After rising yesterday, the dollar and future interest rates should also remain sensitive to the volatility of Treasury yields and, on the exchange rate, there may already be greater technical influence from the rollover of futures contracts on the eve of the formation of the last Ptax of March, tomorrow. In the fiscal area, the Minister of Planning, Simone Tebet, stated that the second Bimonthly Revenue and Expense Report should be more accurate than the one released last week. The leader of the government in the Chamber, deputy José Guimarães (PT-CE), said that he would file the bills yesterday that deal with Perse and the tax relief for municipalities. The Minister of Finance, Fernando Haddad, admitted the possibility that the 2025 surplus target would not be 0.5% of the Gross Domestic Product (GDP), as foreseen in the new fiscal framework and linked the achievement of this objective to the approval of guidelines in the National Congress, in an interview with CNN.
*State Agency
