February 8, 2023
Ibovespa pulls back amid fears of recession in US on angry doomsday

Ibovespa pulls back amid fears of recession in US on angry doomsday

Bloomberg Line – Amid concerns about global growth and a possible slowdown, Ibovespa (IBOV) followed international equity markets to close this Wednesday (7) trading session down 1.02% at 109,068 points. The dollar also fell, closing at R$5.22.

Here, the focus is on the decision of the Central Bank’s Committee on Monetary Policy (COBOM). The Selic rate is to be kept at 13.75% per annum for the third consecutive sessionAs expected by the market.

Ahead of the decision to be announced at 6:30pm (Brasilia time), investors will focus on the report and the group’s growing concerns about worsening financial risk and how this could further affect interest rates.

Still on the domestic front, a Senate vote on the PEC, a change that could pave the way for extraordinary spending by the next government to pay for the Bolsa Familia in 2023 and 2024, is still on the radar. Yesterday (6), text Approved by the Constitution, Justice and Citizenship Commission (CCJ), expanding the spending ceiling by BRL 145 billion to accommodate the current Auxílio Brasil monthly of BRL 600.

Abroad, concerns that the Federal Reserve will maintain its aggressive policy of raising interest rates are putting pressure on risk assets. In a volatile session on Wall Street, stocks fell as much as 0.51%, with heavy exposure to the technology sector, which is highly sensitive to interest rates, as was the Nasdaq.

Investors await next week’s monetary policy meeting in the US, with expectations for a 0.50 percentage point hike. Fears of recession also contribute to external bad mood.

In Latin America, approval was given to impeach Peruvian President Pedro Castillo after he decided to illegally dissolve and hold provisional elections for Congress. With the impeachment of Pedro Castillo, Vice President Tina Poluiarte will take over as President.

Here’s how markets closed this Wednesday (7):

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