untitled design

Ibovespa falls and dollar rises before Fed meeting and GDP preview on radar

The main highlight of this Wednesday (15) was the Fed’s two-day meeting, whose decision will be announced at 4 pm, Brasília time. Market participants expect the monetary authority to accelerate the pace of reduction in their monthly purchases of bonds and anticipate projections for interest rate hikes.

At the same pace as Wall Street, the Ibovespa retreated 0.64%, to 106,071.83 points, around 11:45 am, Brasília time. While the US spot currency rose 0.42%, quoted at R$ 5.714.

The Fed policy update will take place at 4 pm GMT, followed by a press conference, which will signal how the institution is preparing to contain inflation.

This is the first meeting since the institution’s president, Jerome Powell, said last month that he needed to shift focus to prevent higher inflation from happening.

Dollar

The dollar returned initial losses and started to rise on Wednesday, as investors awaited the monetary policy decision of the Federal Reserve, the central bank of the United States.

Earlier, the US currency in cash dropped 0.66%, to R$ 5.657, which some investors attributed to an adjustment, as the dollar comes from a sequence of four consecutive high sessions, a period in which jumped 2.87% against the real.

The day before, the US currency traded on the interbank market was up 0.37% to 5.6955, the highest level since April 13 this year.

“I think today’s meeting was well anticipated, so sometimes it happens [o dólar] go up before it and, on the day, have a more timid reaction, but nothing prevents a reversal of this behavior”, explained Gustavo Cruz, strategist at RB Investimentos, to Reuters.

Higher interest rates in the United States would increase the profitability of investing in US sovereign bonds, considered the safest asset in the world, which would tend to increase the inflow of resources into the country and, consequently, support the dollar.

“The financial market and its investors tend to anticipate movements and the prospect of lower liquidity generates less apprehension than raising interest rates, given the ‘flight to quality’ past that occurred whenever the US raised interest rates ”, said in a statement Jason Vieira, chief economist at Infinity Asset.

domestic setting

In Brazil, market participants also digested the worse-than-expected reading of the IBC-Br (Brazilian Central Bank Economic Activity Index, or GDP preview), which fell 0.40% in October from September.

The drop in data is the latest sign of stumble in Brazilian economic activity, after disappointing readings for the third quarter Gross Domestic Product (GDP) and the retail and services sectors.

In the quarter to October compared to the quarter to July, the IBC-Br retreated 0.94%, deepening the fall after falling 0.65% on this basis of comparison in September and 0.26% in August.

In the comparison between the moving quarter (until October against three months until September) – a measure of trend -, the index decreased by 0.44%, against lows of 0.34% in September, 0.16% in August and 0.14 % in July.

The October 2021 data on a year earlier showed a retraction of 1.48%, a turnaround from increases of 0.69% in September and 4.06% in August.

According to BC numbers, the IBC-Br is 1.90% below the pre-pandemic level and 7.91% below the peak of the cycle, reached in December 2013.

“Our preliminary forecast for the IBC-Br for November indicates growth of 0.4% compared to October. For now, we have the following estimates: growth of 0.3% for the real revenues of the general index of the service sector (PMS); slight decline of 0.1% for real expanded retail sales (PMC); and an increase of 0.5% for industrial production”, says Rodolfo Margato, economist at XP.

radar points

Another two points on the investors’ radar are the shares of slaughterhouses that rose after China released the purchase of beef from Brazil and the PEC dos Precatórios.

The Ministry of Agriculture told CNN Brasil this Wednesday morning (15) that it had received information that China had lifted the embargo on Brazilian beef.

The ministry’s press office informed that it does not have details of the Chinese government’s decision, but specified that it was informed that exports to the Asian country had returned to normal, with the certification and shipment of animal protein.

Among the biggest highlights at around 11:38 am GMT was Minerva (BEEF3) up 9.60% and JBS (JBSS3) up 3.67%.

Brazil was unable to export to its main client for over 3 months, and this had an impact on meat and arroba prices, which left historical highs.

Adriano Castro, an analyst at the Food Sector at Genial Investimentos believes that “prices should go up again, at the levels of historical highs, and this may even have an impact on the costs of slaughterhouses, but the price of meat should accompany this. In general, this is positive news because they are back with their main client and can export throughout Brazil.”

“But it is worth noting that the main slaughterhouses listed already have a wide range of export customers and plants outside Brazil. With that, they were able to manage the origin of the sales in such a way that the restriction on the part of China had a less pronounced effect”, said Phil Soares, head of equity analysis at Órama.

In politics, the Chamber of Deputies approved, yesterday afternoon, the second part of the PEC dos Precatórios, in the first round, which opens up a fiscal space of R$ 106.1 billion to increase spending in 2022.

With that, the government will be able to pay the Auxílio Brasil in the amount of R$ 400 and still demands of parliamentarians.

The text goes to vote in the second round, in a session called for at 10 am this Wednesday (15th).

*With information from Reuters, Priscila Yazbek, CNN, and João Pedro Malar, CNN Brasil Business

Test your knowledge of Ibovespa

Let’s start with an easy one: what is the Ibovespa?

Who is responsible for calculating the Ibovespa?

What types of assets are eligible to be listed on the Ibovespa?

Which of these is NOT a criterion for a stock to be listed on the Ibovespa

How many shares are currently in the theoretical portfolio of Ibovespa?

How often is Ibovespa’s theoretical portfolio revised?

What is the stock with the greatest weight on the Ibovespa?

What is the stock with the lowest weight on the Ibovespa?

Each point on the Ibovespa is equivalent to 1 real. This statement is

What is the historical record for closing the Ibovespa?

Try again!

Tip: follow CNN Business to understand more about the Ibovespa

Nice job!

You know a lot about the Ibovespa, but you could know a little more

Sensational!

Congratulations! You are an expert on Ibovespa

Reference: CNN Brasil

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular