The fear of a possible invasion in Ukraine continues to worry the market, with investors also following the trip of President Jair Bolsonaro (PL) to Russia.
Starting abroad, US futures indexes operate lower, with the escalation of tension between Russia and the West. The US request for Americans to leave Ukraine had already affected the indexes on Friday (11). However, the The situation worsened with the lack of progress in the conversation between Presidents Joe Biden and Vladimir Putin over the weekend.
Analysts assess that the market has started to price a possible Russian invasion. However, Roberto Attuch Junior, from OhmResearch, considers that it is difficult to estimate how far the situation can go. Another analyst also points out that when it comes to Russia, it is very difficult to tell if the markets are exaggerating. As the worst of all worlds for the market is uncertainty, the indices fall.
The Vix market index, known as the ‘fear index’, is up 14% in the morning, to the highest level since December.
At the moment, there are two major uncertainties in the air: the first is Russia, and the second is the minutes of the United States Monetary Policy Committee (FOMC), which will be released on Wednesday (16). With US inflation hitting a record in four decades, the Federal Reserve (Fed) has been giving the markets tougher indications. It is not clear the size and pace of the tightening that the US Central Bank will make.
With the risk aversion climate weighing on, European indices fell more than 3% in the morning, to the lowest since January. Asian stock markets closed negative.
Brazil
Coming to Brazil, the rotation for commodities and oil hitting the maximum in seven years continue to shield the Brazilian stock market, which had a slight increase on Friday (11). This Monday, the weather should weigh on the Ibovespa, unless there is any diplomatic advance in Ukraine.
Investors are also monitoring President Jair Bolsonaro’s (PL) trip to Russia, citing two main risks. The first would be some military advance with the president on Russian soil, and the second the possibility of Bolsonaro’s speeches being interpreted as support for Vladimir Putin.
Attention to fiscal risks also continues here in Brazil. Analysts point out that Bolsonaro’s worsening in election polls increases pressure on public spending, with measures such as the PEC dos CombustÃveis, which aim to boost the president’s popularity.
Finally, the Focus Bulletin has just been released. The inflation forecast for this year rose from 5.44% to 5.5%, but remains at 3.5% for next year. 2022 GDP was held at 0.3%, but dropped from 1.53% to 1.5% in 2022.
The main highlight of this Monday’s bulletin is the Selic rate. After the result of the Consumer Price Index (IPCA) in January and the In the toughest minutes of the Central Bank (BC), the Selic increased from 11.75% to 12.25% this year, and remained at 8% for next year.
Ibovespa Futuro has a slight drop of 0.32%, at 113,266 points, and the dollar rises 0.32%, at R$ 5.25. THE S&P 500 Futures is down 0.94% to 4,377 points.
Agenda of the Day
In addition to the Focus Bulletin, at 15:00 there is the performance of the trade balance. Also pay attention to the arrival of President Jair Bolsonaro in Russia. The balance sheet season continues, with results from Banco do Brasil and Itaúsa, after closing.
Abroad, Federal Reserve member James Bullard speaks at 10:30 am. Christine Lagarde, President of the European Central Bank, speaks at 1:15 pm. At night, she has the result of Japan’s GDP.
Source: CNN Brasil
