The stock market today opens higher and the dollar falls with investors reflecting inflation data in Brazil and the United States released this Friday morning (26).
The American PCE came in as expected, which alleviates some of the pressure on future interest rates abroad. While, in Brazil, the news is even more positive: the IPCA-15 was lower than expected.
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So, around 10:35 am, the Ibovespa rose 1.31%, to 126,281.17 points. As a result, the stock market index and the dollar are moving in the opposite direction to the previous session, when Vale (VALE3) and interest rates affected investors’ mood.
Dolar today
On the other hand, the dollar was falling at the time mentioned. The North American currency fell 0.71% against the real, quoted at R$5.1255.
Abroad, the dollar rose. The DXY, the global currency index, advanced 0.22%, to 105.83 points.
An important piece of data for the stock market today is the PCE, one of the inflation indicators in the United States, the Fed’s favorite to guide interest rate policy.
Thus, the index registered an increase of 0.3%, in line with what was expected, and the core is also in line with estimates.
“There is relief after the GDP deflator, which was worse than expected. Yesterday the data was very bad, with weaker GDP and higher inflation. Now, the PCE, focused more on the consumption basket, brings good news”, says Paulo Gala, chief economist at Master bank.
As a result, the 10-year Treasury drops to 4.66% after yesterday’s rise, when it reached 4.70%.
“Now, there is some prospect of an interest rate cut in September, with the markets more relieved, and the stock markets should benefit, as well as the real”, adds Gala.
Inflation in Brazil
Furthermore, April’s IPCA-15 recorded inflation of 0.21% MoM (3.77% YoY). As a result, the data is below expectations, the median of which pointed to an increase of 0.29%. Furthermore, it is below the upper limit of the RMI set for 2024 (4.50%).
“Analyzing the behavior of the large groups that make up the indicator, one of the highlights of today’s release was the Food group, which went from 0.91% MoM in March to 0.61% MoM in April. Its magnitude was affected by seasonal movements and the production dynamics of more elaborate products”, highlights Carla Argenta, from CM Capital.
Therefore, the scenario is favorable for the interest rate cut at the next Copom meeting, assesses Ana Paula Carvalho, financial planner and partner at AVG Capital.
“There may be pressure on the dollar if the interest rate differential between Brazil and the USA decreases if the rate of decline in the Selic continues”, he ponders.
“Given this data, in my view, I believe that the BC will continue the rate of decline of 0.50% for the next meeting”, adds Ana Paula.
Copom will meet again on May 7th and 8th.
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