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Volatility marks markets this Thursday; indicators are highlighted in Brazil

Volatility seems little to qualify the movement of markets in this war in Ukraine. Oil, exchanges, currencies, minerals, grains — there is no asset that escapes an unpredictable roller coaster.

In a report published yesterday, Ethan Harris, global economist at Bank of America, assumed an almost powerlessness to elaborate probable scenarios. The bank’s assumption is for many months of high uncertainty, high energy prices and low growth.

The meeting of the ministers of Ukraine and Russia in Turkey ended without an agreement and with antagonistic versions of the facts. It was the trigger to reverse the mood and return yesterday’s recovery.

Stocks in Europe and futures in New York are down and oil is up again. Even in the face of unpredictability, the automobile industry warned: parts have already started to run out.

The global CEO of Volkswagen said that the effect of the war on production chains could be worse than that of the pandemic. Porsche has suspended production of a model due to a lack of parts from Ukraine.

Amid so much uncertainty, there is a conviction: inflation will rise and will be persistent. Soon the European Central Bank will decide to keep the interest rate at zero and the bond purchase program out of fear of the effects of the war on economic activity in the region.

The US inflation rate for February also comes out in the morning and the US government has already warned that it will be high, it could get closer to 8%.

Brazil

In Brazil, there is volatility in the markets as well, but the confusion seems more appropriate to define the debate on fuel prices.

With no solution and no project advancing in Congress, the government is alternating the order of factors hoping to find the same result: a formula to avoid passing on the rise in oil to diesel and gasoline.

Pressure also coming “from within”. The company’s directors’ report to Bloomberg shows the discomfort of the board with the delay in price adjustment. The supply risk returned to the distributors.

Between the war and the domestic clashes, the market is more inclined to pass on external risk.

The IBGE (Brazilian Institute of Geography and Statistics) released this morning the trade result in January, up 0.8%, above expectations. In the annual comparison, the result is a fall of 1.9%. Extended retail fell 0.3%, better than expectations for a drop of above 1%.

The yield curve opened higher, reflecting revisions to the Selic – the basic interest rate – at the end of the upward cycle, which passed 13%. There is also a change in expectations for a decision by the Monetary Policy Committee (Copom) next week, to a stronger rise, above 1 point.

Indexes

The futures Ibovespa is down 0.54% with 114,066 points. The dollar rose 0.33% to R$5.02 and the S&P futures fell 0.87%.

Agenda of the Day

In Brazil, the result of the General Register of Employed and Unemployed (Caged) for January, which has just been released, with 160 thousand vacancies created in the first month of the year. There is also an analysis of data on economic activity and the voting of presidential vetoes in the National Congress with the risk of high costs for the treasury.

Abroad, the developments of the war remain on the radar, with Kamala Harris, US vice president, in Poland. US Treasury Secretary Janet Yellen will give an interview later today.

Source: CNN Brasil

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