Market opens week divided between optimism and concern about PEC of Precatórios

The Brazilian financial market starts the week in a holiday mood, but divided between optimism and concern.

With the week shorter because of the November 2 holiday, all tension about what will become of the PEC dos Precatórios will be squeezed into four days.

So far, there has been no sign of approval of the proposal in time to ensure that the government is able to start paying the Auxílio Brasil of R$400 by the end of the year.

According to the opinion of the policy analyst of the CNN Gustavo Uribe, the government is considering paying the precatório owed to teachers in a shorter time, until 2024. This could dissolve the point of greatest resistance to the advance of the PEC in the Chamber of Deputies.

Jair Bolsonaro’s participation in the G20 meeting drew attention due to the president’s weakened agenda, with no bilateral meetings of interest to the country. The start of COP26 in Glasgow will have more market attention, as Brazil is in the focus of the debate.

In the economy, expectations for the release of the Copom minutes, which, exceptionally this week, will be released on Wednesday, at 7:00 am.

Even after promoting the biggest increase in the Selic since 2002, the Central Bank was not able to hold the expectations of economic agents about the worsening of inflation in the coming years.

Focus report released earlier today brought another round of revisions for inflation, GDP and interest rates. This year, the IPCA should close at 9.17% and the GDP at 4.94%, with the Selic reaching 9.25% in December.

For 2022, expectations for inflation rose for the fifteenth consecutive week, from 4.40% to 4.55%. For the first time, the forecast for the Selic reaches double digits – analysts expect the BC to raise the rate to 10.25% next year.

World

Abroad, the futures indexes of the American stock exchanges start the month in high, after closing October with the best results in a year.

Half of the companies that make up the indexes have already released their third quarter results, with good surprises, pushing the market up.

Expectations for the next phase of disclosures and the Fed’s decision, next Wednesday (3), reinforce a positive opening.

China released data on economic activity confirming the loss of intensity in the recovery. The energy crisis, higher costs and reduced consumption led the official purchasing index to below 50 points in October, indicating a contraction in the economy.

Stock markets in China and Hong Kong fell, but Tokyo started the month with a rise of 2.5% as a result of elections in Japan that guaranteed a majority to the government in parliament.

Copper and oil prices have opposite directions on Monday. Covers with a sharp drop in Asia, reflecting a slowdown in the Chinese economy. Oil rises in anticipation of the OPEC+ decision on production volume.