The stock market today is operating in a steady decline, while the dollar soars after the meeting of the Central Bank’s Monetary Policy Committee (Copom) decided to drop interest rates by 0.25 percentage points, with the institution’s president, Roberto Campos Neto, with the vote of minerva for a smaller drop than previously signaled (0.50 pp).
Given this, what caught the most analysts’ attention was the division in votes: five votes in favor of a drop of 0.25 and four for maintaining the pace, with a cut of 0.50.
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Furthermore, the statement was quite shallow, which raises expectations for the next meeting.
So far, Itaú BBA’s projection is for a terminal rate of 9.75%, but there may be corrections next week.
As a result, around 10:30 am, the Ibovespa fell 1.34%, to 127,749.70 points.
Dolar today
At the same time, the dollar registered an increase of 1.38% against the real, quoted at BRL 5.1609.
The performance of the exchange rate reflects a scenario that is less conducive to risky investments, which keeps investors away not only from the Brazilian stock market, but also from investments in fixed income, causing a flight of capital to more stable economies, such as the American one, which has been offering interest rates very attractive interest rates.
Furthermore, American stock markets show recovery this week, indicating that the scenario is for investors to enter both fixed and variable income in the USA.
Repercussions on the Copom decision
The repercussion within the government was quite negative. PT president Gleisi Hoffman called the decision “a crime” against the country’s economy.
The vice-president of the Republic, Geraldo Alckmin, asked for more speed in cutting interest rates.
Floods in Rio Grande do Sul also impact the stock market today
In addition to the humanitarian tragedy, which is the main aspect of the floods in Rio Grande do Sul, there are also concerns related to the economy. Analysts still have difficulty defining how much of the capital stock will be lost. Some accounts reach 1% of GDP.
The loss of rice, fundamental to the Brazilian diet, should be the main product impacted by the rise in prices.
Furthermore, there are fears related to soy, an important product for the performance of the Brazilian trade balance.
However, these concerns about soy are lessened due to the “loose supply” of the commodity on the market, according to Itaú BBA Research leader, Pedro Renault.
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