Ibovespa fell 0.17%, amid pressure from abroad and with financial risks; Advances in dollars 0.60%

The Ibovespa index closed 0.17% lower at 100,591 points this Tuesday (28). The main index of the Brazilian Stock Exchange advanced during the morning, but ended up with the pressure of the international market as well as the domestic interest curve.

But in the United States, the declines were larger than those recorded in the domestic scenario. The Dow, S&P 500 and Nasdaq are down 1.56%, 2.01% and 2.98%, respectively. There, investors continue to position themselves cautiously, awaiting the release of the Consumer Expenditure Price Index (PCE), the country’s main inflation indicator, due for release on Friday.

Moreover, Fabrizio Filoni, chief economist at Frente Corretora, points to the fact that US inflation expectations for the next twelve months, as measured by Conference Boardreached a record 8%, denting market confidence and raising fears that the Federal Reserve may speed up interest rate hikes.

Rodrigo Crespi, analyst at Guide Investimentos, also highlights comments from Federal Reserve managers, who have boosted the prospects for higher interest rates in the US.

John Williams, of the Federal Reserve Bank of New York, said in an interview with CNBC that, at the July meeting, the US Monetary Agency will discuss increases of 50 or 75 basis points and that the US economy should be at restrictive levels through 2023. Mary Daly argued, From the Federal Reserve Bank of San Francisco, she said she sees the US economy growing less this year, although there is no recession yet.

Rising commodities also helped boost the US yield curve – profit return Of the two-year bonds, it rose one basis point to 3.12%.

Today, in China, iron ore is up 3.80% in Qingdao, at $124.82 per ton. Brent crude, in turn, rose 2.37% to $117.82 a barrel.

Commodities responded positively to the news of a small sign of openness from the Chinese government regarding Covid zero policy. The government of the second largest economy has halved the time that tourists have to remain in quarantine to enter the country,” explains Bruno Di Giacomo, CIO at Blackbird Investments. “This was seen as a potential resumption of Chinese demand, with The state’s weakening of restrictions.”

Ibovespa can’t keep up with the rise in merchandise

In Brazil, despite the rise in non-manufactured products, which account for a large part of the index, Ibovespa felt strong pressure from lower risk aversion worldwide and also from the yield curve.

“Commodities mitigated the biggest drop that could happen in Ibovespa, they were the only ones that contributed positively in practice,” Di Giacomo says. “he was there Sale coming from abroad, with the market seeing the risk of a recession in the US and also noting a stronger pace from the Federal Reserve in raising interest rates.”

Even with higher non-manufactured products that tend to benefit Brazil in its trade balance, the dollar closed 0.60% higher, at R$5.266 in purchases and sales, after DXY, which rose 0.53%.

In addition to lower risk aversion, DI indicators were also negative highlights of the trading session. The 2023 and 2025 contracts saw their rates rise by 10 and 26 basis points, respectively, to 13.77% and 12.86%. The DIs for 2027 and 2029 saw their returns rise by 24 and 21 points, to 12.79% and 12.91%.

“The number of increase in public debt has grown at an accelerated rate,” comments Fabrizio Filoni, referring to the publication that federal debt increased by 2% in May, reaching R$ 5.7 trillion. “Even the news from China, with easing Closedid not hinder Ibovespa’s performance.”

Finally, Rodrigo Crespi points out that the market was in a bad mood due to the political news.

“There is a fear that the initial cost of fuel to be introduced will result in more expenditures than anticipated,” he says. “Finance has made the interest curve widen, which has had an impact on businesses focusing on the local economy. Retail, banking, healthcare and education — companies in all of these sectors have fallen hard.”

The Rapporteur of the Presidential Election Commission, Senator Fernando Bezerra Coelho (MDB-PE), has again postponed the presentation of his opinion to Wednesday at 9:30 am (Brazilian time).

Among the biggest declines in the Brazilian index were ON shares in Positivo (3 . point of sale) and through (VIIA3), a decrease of 5.7% and 5.46%, respectively. Hapveda (HAPV3) vein role )RDOR3), down 5.78% and 4.05%.

On the upside, Vale’s ON shares stand out (VALE3) which increased by 1.59%. Petrobras ON and BN (PETR3;PETR4), in turn rose 1.43% and 1%.

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