Ibovespa rises more than 1% and dollar retreats with optimism and US inflation on the radar

O Ibovespa rose 1.33%, quoted at 113,794 points, around 10:20 am this Monday (12), following the good performance of stock exchanges abroad. most of actions was operating on the upswing, with emphasis on commodities, which follow the rise in oil and iron ore, and on banks.

At the same time, the dollar fell 0.35%, to R$ 5,129, benefited by a favorable flow of foreign investments. Despite investor optimism, the market is still waiting for the release of the Consumer Price Index (CPI) of the United States which will be announced on Tuesday (13).

the indicator can give clues on the next steps in the cycle of interest rate hikes in the Federal Reserve . The market expectation is that the autarchy will raise the interest rate by 0.75 percentage point, the third consecutive in this magnitude.

On Friday (9), the dollar fell by 1.16%, to R$ 5.146, with a 0.78% decline in the week. The Ibovespa registered an increase of 2.17%, to 112,300.41 points, having appreciated 1.3%.

overall feeling

Investors’ global risk aversion, triggered by fears about a possible generalized economic slowdown due to a series of interest rate hikes around the world to contain record levels of inflation, has varied in intensity depending on expectations about the cycle of interest rate hikes in United States .

The process of raising the US rate continued in July with a new increase of 0.75 percentage point. However, the Federal Reserve signaled that it could make smaller increases as the country’s economy already shows signs of deceleration, seeking to avoid a recession.

Higher interest rates in the United States attract investments for the country’s fixed income due to its high security and favor the dollar, but harm markets and stock exchanges around the world, including the North American ones.

Investors also monitor the state of the economy in China , which also shows signs of a slowdown linked to a series of lockdowns in relevant cities. The expectation is that the Chinese government will intensify an effort to stimulate the economy, while facing difficulties to reverse a situation of low consumption by the population, which impacts the country’s demand for commodities.

Even so, the Ibovespa and the real found room for recovery with an improvement in the mood of the market, supported by the positive outlook for commodities, a stronger domestic economic scenario and a reduction in the perception of risks in relation to the elections. The scenario, however, may change depending on the degree of risk aversion abroad.

*With information from Reuters