Market starts week with an eye on PEC dos Precatórios and on the advancement of Covid-19 in Europe

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The week starts with the market eyeing the discussions around the PEC of Precatório and the risks in the government accounts. Abroad, the focus is on advancing the pandemic across Europe.

Senator Fernando Bezerra, rapporteur of the PEC dos Precatórios, must present his opinion on Wednesday (24) at the Committee on Constitution and Justice (CCJ). The expectation is that the vote takes place in the next few days and the PEC goes to plenary next week.

Bezerra evaluates slicing the PEC, excluding points in order to facilitate a partial approval of the project. The excluded points would be reincorporated in a new text, highlighting one that foresees transforming Auxílio Brasil into a permanent proposal.

The Arko Advice consultancy points out a trend of approval of the PEC dos Precatórios until the first week of December.

Also in the political field, senator Angelo Coronel, rapporteur of the Income Tax Reform in the Federal Senate, said that he will present this week a new project to readjust the IR table, raising the exemption from R$1,903 to R$3,000. Regarding the reform approved in the Chamber, the rapporteur stated that the text is bad and will hardly go through the Senate.

World

The week will be short on the American market with Thanksgiving on Thursday (25), but it will still have important facts.

On Wednesday, the PCE comes out, inflation data that investors are waiting for and will indicate the temperature of prices in the United States.

Before the holiday, Joe Biden must decide who will be the new president of the Fed, the US Central Bank. If Jerome Powell is not kept, Leo Brainard is the favorite.

In Europe, indices are recovering from losses on Friday, when stocks fell on the Austrian lockdown announcement. The pandemic situation on the continent worries investors. The German health minister said he could follow in the footsteps of the Austrian government.

The weekend was marked by anti-lockdown protests in Austria and the Netherlands.

In Asia, the indices closed mostly higher. The Chinese Central Bank decided to keep interest rates unchanged. Stocks rallied on speculation interest rates could be cut at the December meeting. Which would be good for the market, as lower interest rates tend to boost the economy and increase the attractiveness of stocks.

agenda of the day

The Central Bank Focus Bulletin was released.

The weekly survey shows that this year’s inflation forecast rose for the thirty-third time in a row, going from double digits, to 10.12%. It has also been adjusted for the year 2022 to close to 5%.

The market also reduced again its projections for this year’s GDP, which dropped to 4.8%. For 2022, the forecast dropped to 0.7% and the Selic rate for next year rose to 11.25%.

Reference: CNN Brasil

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