Ibovespa rises with attention in the PEC dos Precatórios and Ômicron; dollar has a slight drop

Markets, including the Brazilian Stock Exchange, are operating with a recovery mood this Wednesday (1st), with investors paying attention to new news about the Ômicron variant.

At 1:41 pm, Brasília time, the Ibovespa rose 1.24%, to 104,178.64 points, while the dollar was hovering around stability, down 0.01%, quoted at R$ 6.378.

The government of São Paulo confirmed this morning the third case of Ômicron in the country, of a passenger coming from Ethiopia. Authorities in South Africa have been reporting that there are no serious cases related to the new strain and hospitalizations are recorded for people who did not take the vaccine, in most cases.

“The 29-year-old man was tested at the airport when disembarking in the country and had no symptoms. He is vaccinated with two doses of Pfizer’s immunizer and is doing fine. He has been in isolation at home since last Saturday and is being monitored by the surveillance of the city of Guarulhos, where he resides,” said the São Paulo State Secretariat in a statement.

The first two cases were in a 41-year-old man and a 37-year-old woman who came from South Africa. Both received Janssen’s single-dose vaccine.

It is worth remembering that the executive president of Moderna, Stéphane Bancel, said that the immunizing agents already produced are probably less effective against Ômicron.

PEC of Precatório

Coming to Brazil, the PEC dos Precatórios passed in the Constitution and Justice Commission and can still be voted on in plenary this Wednesday. As expected, one of the highlights of the text is that it removes the need to indicate a source of revenue to pay for Brazil’s Auxílio, which is provided for in the fiscal responsibility law. The rapporteur, Fernando Bezerra (MDB-PE), changed the text so that this exemption from the source is restricted to 2022 and the rule returns in 2023.

Economists say that the PEC opens loopholes for uncontrolled public spending and circumvents fiscal rules. Even so, the stock market has been rising with the advance of the PEC, because the market assesses that it is the well-known path, and that other solutions to support Auxílio Brasil could be worse.

Investors are concerned that a possible non-approval of the text will imply alternative plans by the government to fund the program in an election year, which would potentially be more damaging to the fiscal situation.

The market also monitors the hectic day in politics, with André Mendonça’s hearing.

Agenda of the Day

This morning the FGV consumer inflation index was released. The IPC-S accelerated from 0.77% in October to 1.08% in November, driven by fuels and energy. Even today, the exchange flow will also be released, at 2:30 pm, and the trade balance, at 3:00 pm.

*With information from Reuters and collaboration by Ligia Tuon and Artur Nicoceli