Indicators of industrial production in Brazil and the ADP report on jobs in the US private sector, in addition to PMIs for Services, should be followed by the markets this Wednesday, in addition to speeches by the president of the Central Bank, Roberto Campos Neto, and several leaders of the Federal Reserve, including its chairman, Jerome Powell. OPEC+ meeting could also affect oil prices.
Exterior
Doubts about this year’s interest rate cut cycle in the US keep New York futures low and Treasury interest rates high, while the dollar oscillates close to stability against other relevant currencies amid waiting for new indicators and signs of Fed officials, especially Jerome Powell. Last Friday, Powell stated that the definition of the moment for interest cuts will depend exclusively on data and the performance of the economy, warning that the Fed may even extend the period of maintenance of the restrictive policy, if there is no progress in the reduction of inflation. “We are very committed to reducing inflation to the 2% target”, he reiterated.
The US consumer spending price index (PCE), the Fed’s preferred measure of inflation, increased 0.3% in February compared to January, coming in below analysts’ forecast (0.4%) but, in the annual comparison, the PCE rose 2.5% in February, gaining slight strength compared to the 2.4% increase seen in January.
Nasdaq futures are also pressured by the 5.21% drop in Intel shares in the pre-market at 7:10 am, which extends losses of 4% recorded in the after hours, after reporting that its chip manufacturing unit increased the operating loss of US $5.2 billion in 2022 to $7 billion last year.
In Europe, gains on the stock exchanges predominate, with the exception of London, but the euro lost strength against the dollar after the slowdown in consumer inflation (CPI) in the euro zone and its core, which were below expectations in March, while the rate unemployment in the region remained at 6.5% in February compared to January. Oil sustains a slight gain and remains at the highest levels in five months, amid persistent tensions in the Middle East and the conflict between Russia and Ukraine, factors that threaten the supply of the commodity.
Brazil
The negative tone in NY and the 2.54% drop in iron ore in China should maintain pressure on the Ibovespa and Vale shares, while a slight rise in oil prices could benefit Petrobras shares. Investors will also review industrial production data, PMIs and monitor Campos Neto’s lecture, amid expectations of possible anticipation in the transition process at the Central Bank. The market median indicates an increase of 0.3% in industrial production in February, after a drop of 1.6% in January, and in comparison with January 2023, growth of 5.7%, compared to +3.6% in January , on the same metric, according to Projeções Broadcast.
In the foreign exchange and future interest markets, the rise in Treasury yields should influence adjustments and financial agents do not rule out new intervention by the BC with the sale of the dollar, after the American currency closed on the rise yesterday, at R$ 5.0583, even after the market absorbed the full amount of US$ 1 billion in currency swaps in an extraordinary auction.
News related to the tax field is also in the spotlight. The Minister of Finance, Fernando Haddad, stated yesterday that tax spending has tripled in the last ten years and this is dysfunctional, at a Bradesco BBI forum. “The path is spending limits, tax spending reviews and neutral tax reform.” He said that based only on spreadsheets, the public deficit can be resolved in 15 days, but within the political and social reality it requires more time. Planning Minister Simone Tebet said that this year’s fiscal target is assessed “month by month” and highlighted May as the period in which the government will have a “real vision” of what will happen to the 2024 target, set to reach zero. the deficit in the primary result. Next month is when the government publishes the second bimonthly Income and Expense assessment report.
*State Agency
