Interest rate decisions by the Monetary Policy Committee (Copom) of the Central Bank and the Bank of England (BoE) are among the highlights this week. Speeches by directors of the European Central Bank, Bank of England and the Federal Reserve (Fed), including the presidents of the New York districts, John Williams, Richmond, Tom Barkin, and Minneapolis, Neel Kashkari, are also expected. Investors also reflect on the European, United States and global purchasing managers indices (PMI). In Brazil, the focus today is on the results of the consolidated public sector, and on a series of balance sheets, including BB Seguridade and Itaú Unibanco. In the following days, trade balance, retail and IPCA data are expected, as well as other quarterly results, including Banco do Brasil, Embraer, Eletrobras, B3, Magazine Luiza and Sabesp.
Exterior
The dollar against major currencies rises this morning, limiting the gains of index futures in New York, after increases of close to 2% on Friday in the wake of weaker than expected data from the US labor market. Investors are once again considering the chances of the Federal Reserve (Fed, the American central bank) cutting interest rates in September and the possibility of a 50 basis point drop this year. Last week, the Fed left rates unchanged for the sixth consecutive time, in the range of 5.25% to 5.50% per year. With no indicators on the American agenda today, investors await speeches from two Fed officials.
In Europe, stock markets rise, reflecting an increase in service PMI activity data in the region and excited by the possibility of monetary easing in the USA. The euro zone’s producer price index (PPI) fell 7.8% year-on-year in March, compared to analysts’ forecast of -7.7% and after falling at a stronger pace in February. of 8.5% (after revision of -8.3% previously).
Oil is also advancing, after falling around 6% last week, citing an increase in the price of the commodity by Saudi Arabia in June for Europe and Asia and given the weak prospect that Israel and Hamas will be able to reach a ceasefire agreement. .
In China, stock markets made firm gains on the return of a three-day holiday, with the possibility of an interest rate cut in the US and the Politburo meeting last week, leaving the S&P Global/Caixin survey showing a drop in the services PMI in the background. Chinese in April, to 52.5.
Brazil
The Stock Exchange may be encouraged by Wall Street and the rise in commodities. Iron ore rose 2.63% in Dalian, China and could soften reactions to news about Vale’s command. Oil is also advancing, boding well for Petrobras, but Sabesp tends to react to the Court’s decision to suspend the session of the São Paulo Chamber that approved the bill for the capital’s accession to the privatization of Sabesp.
Investors will also look at public sector fiscal data. The prospect of an increase in extraordinary government spending due to the climate disaster in Rio Grande do Sul is on the radar.
Dollar and future interest rates in slight increases may also affect the adjustments in the future interest rate curve and the exchange rate. On the fiscal agenda, pressured to find a middle ground to the impasse regarding exemption from municipal payrolls and with an eye on the Congress session to analyze presidential vetoes scheduled for Thursday, 9th, the Lula government appealed to the president of the Commission of Constitution and Justice (CCJ) of the Senate, Davi Alcolumbre (União-AP), in order to sign a major agreement that resolves the two pending issues and opens political space to move forward with the regulation of tax reform. If it wants to maintain, in 2025, the income tax exemption for those earning up to two minimum wages, the federal government will have to give up another R$4.3 billion in revenue, calculated the National Association of Tax Auditors of the Federal Revenue of Brazil ( Unafisco).
*State Agency
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