Market operates with an eye on IPCA above expected in Brazil and awaits US data

The markets operate this Tuesday (11) with an eye on inflation data in Brazil and abroad.

Starting with the international scenario, since the minutes of the Federal Reserve (Fed), the market has been reacting with lows to the prospect of higher interest rates and less stimulus in the US economy, the largest in the world.

Now the attention turns to the US Consumer Price Index (CPI) inflation data, which will be released on Wednesday (12). The forecast is for an inflation of 7% year on year. The data will show whether the Fed was behind the curve, that is, whether it took too long to act to contain inflation.

Today, the market also monitors the speech of Jerome Powell, chairman of the Fed, which may bring more indications about the direction of interest rates and stimulus in the country.

Tech stocks have been the hardest hit by the rise in interest rates, but bargain-hunting traders avoided a fifth straight loss on the Nasdaq, and the tech exchange closed its biggest one-day rally since March 2020.

The recovery of Techs in the United States boosts the European indices, which rise this morning. In Asia, stock markets fell, reflecting caution abroad and with the advance of the Covid-19 Omicron variant.

Brazil

Coming to Brazil, the highlight is the result of inflation in 2021. According to the Brazilian Institute of Geography and Statistics (IBGE), the Broad Consumer Price Index (IPCA) rose 10.06% last year. As a result, inflation ends 2021 at the highest annual high since 2015. In December, the index rose 0.73%, above what was expected by the market, which had expected an advance of 0.65%.

Also noteworthy are mining and steel companies, which paralyzed production because of the rains in Minas Gerais. Vale shares fell, also pulled by the fall in the price of iron ore, with the advance of Covid-19 in China. Steel companies rose. Ore is the raw material for steel, so when it drops, it makes production cheaper.

Gilberto Cardoso, a commodities specialist at OhmResearch, said that for now, the rains are not affecting stocks as much because they are seen as a temporary problem. However, if the situation drags on and hurts ore supplies, stocks could suffer more.

The Ibovespa Futuro fell 0.15% in the morning, to 102,955 points, with the dollar falling 0.31%, to R$5.65, S&P 500 Futures, by contrast, rose 0.35% to 4,686 points.

Agenda of the Day

In Brazil, the highlight is inflation, which was released this morning. Abroad, highlight for Jerome’s speech Powell and other Fed members at 12 noon. At the end of the day, API oil stocks come out.