Dollar gains strength along with rising Treasury returns after ADP data

The dollar rises in the spot market amid the 2.51% fall in iron ore and the increase in the appreciation of Treasury yields following higher-than-expected employment data in the US private sector, which reinforce doubts about the easing cycle of interest rates in the US this year.

In the US, consultancy ADP reported that the private sector created 184 thousand jobs in March, above the forecast of +150 thousand. In addition, private sector job creation in February was revised from 140 thousand to 155 thousand. Last Friday, the president of the Federal Reserve, Jerome Powell, who was speaking this Wednesday, 3 (1:10 p.m.), 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 reducing inflation.

On the internal agenda, industrial production fell 0.3% in February compared to January, in the seasonally adjusted series, the Brazilian Institute of Geography and Statistics (IBGE) recently reported. The result contradicted the median forecast of analysts heard by Projeções Broadcast, an increase of 0.3%.

In relation to February 2023, production rose 5.0%, below the positive median of 5.7%, with a range of 1.9% to 7.0%. However, February was the seventh consecutive month of annual increase in industrial production. So far this year, the industry has seen an increase of 4.3% and, in 12 months, there was an increase of 1.0%, compared to an increase of 0.4% until January.

Investors are also awaiting service PMI data from Brazil and the USA and a speech by the president of the Central Bank, Roberto Campos Neto (10 am), as well as other Federal Reserve directors throughout the day.

Earlier, oil futures accelerated gains to around 1% after the OPEC+ ministerial meeting ended without recommending changes to the current commodity supply restriction policy, as expected.

In China, the government eased rules on car financing in a bid to boost sales in the world’s biggest auto market.

At 9:37 am, the spot dollar rose 0.42%, to R$5.0793. The dollar for May gained 0.19%, at R$5.0920.