The week changes the month, from April to May, and brings an important economic agenda. The Federal Reserve’s (Fed, the American central bank) monetary policy decision and the interview by its president, Jerome Powell, are scheduled for Wednesday, May 1st, when Brazilian markets will be closed for the Labor Day holiday. Other highlights are China’s PMIs, consumer inflation in the Euro Zone, Germany and the release of the US jobs report, the payroll. Among the main American balance sheets are Apple and Amazon. Around here, Monday should already be full, with data from the Central Government, a lecture by the president of the BC, Roberto Campos Neto, in addition to the publication of Petrobras’ production and sales report for the 1st quarter of 2024. Also, in the following days , the Caged numbers, current transactions, IDP, industrial production and quarterly results from Bradesco and Santander come out.
Exterior
A positive atmosphere prevails in New York this morning. Future indices rise, while Treasury interest rates and the dollar fall amid today’s empty agenda and expectations for the Fed’s interest rate decision and the payroll. Among analysts, there is unanimous support for maintaining interest rates in the current range of 5.25% to 5.50% and the market is waiting for signs from the statement and from Powell on when the monetary authority will be able to start the downward cycle.
In Europe, the signals are divergent, with investors digesting corporate balance sheets and after frustration with the drop in the euro zone’s economic sentiment index, which measures the confidence of corporate sectors and consumers, to 95.6 points in April, compared to 96.2 points in March, contradicting the forecast for the index to remain at 96.3 points.
In Asia, stock markets rose in general, following the jump in shares of Chinese developers, reverberating the news that Chengdu, capital of the Chinese province of Sichuan, eliminated restrictions on housing purchases. As a result, the weak data on Chinese industrial profit, which suffered an annual drop of 3.5% in March, ended up taking a backseat.
In Japan, the stock exchange did not operate due to a holiday, but the yen had sharp fluctuations against the dollar during the night, first renewing its lowest in 34 years and then recovering strongly amid rumors of intervention by the Japanese government in the foreign exchange market.
Brazil
The Stock Exchange may have a short breather influenced by Wall Street, but under downward pressure due to the decline in oil and 0.51% in iron ore today in China. Expectations for balance sheets and Petrobras’ production and sales report should also affect adjustments at B3, after the good mood on Friday with the confirmation of the distribution of half of the extra dividends for 2023 by the state-owned company and the potential payment of the remainder by the end of the year.
The IGP-M and Central Government data will also be monitored. The financial market expects a primary surplus of R$1.4 billion for March, on average, driven by the good performance of measures to increase revenue approved by the government and items linked to the activity, Projeções Broadcast found. For the IGP-M, the market median indicates an increase of 0.12% in April, due to the expected increase in soybean prices, after two consecutive months of decline.
With the local holiday on Wednesday, the reaction to the Fed’s interest rate decision will be on Thursday. The fall in Treasuries and dollar interest rates this morning could bring relief to the future interest curve and the foreign exchange market, which could also become more volatile on the eve of the definition of the last Ptax rate for April tomorrow. The perception that the Federal Reserve (Fed, the American central bank) may take longer to cut interest rates in the United States and the new increase in fiscal tension in Brazil already make the market see a growing chance of the Central Bank (BC) being forced to end the monetary easing cycle with a double-digit Selic rate, probably at 10%.
On the fiscal side, the Minister of Finance, Fernando Haddad, assessed that it was absolutely “possible” for the Union to return to a level of revenue already recorded in the past, as in 2011 – when fighting, for example, to reduce tax expenditure – and said to be “sure” that measures to recover the tax base would not pass in Congress if the primary result target was not demanding, in an interview with journalist Mônica Bergamo, from Folha de S.Paulo.
The president of the Senate, Rodrigo Pacheco (PSD-MG), called Haddad’s statement “unnecessary”, that Congress “also has to respect” the Fiscal Responsibility law. The vice-president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin, said that fiscal responsibility is everyone’s duty, but that President Lula’s government is characterized by dialogue between the powers.
*State Agency
