After a favorable first quarter for domestic assets, the dollar is trading lower against the real and the stock market is up this Friday (1st). During the trading session, investors echoed the release of labor market data in the United States below expectations.
At 1:30 pm, the US currency traded down 1.17% at R $ 4.7033, hitting a low of R $ 4.6894. At the same time, Ipovespa was up 0.95% at 121,135 points.
USA: 431 thousand job creation in March
The U.S. Labor Market report, known as the “payroll”, created 431,000 non-agricultural jobs in March, compared to 750,000 created in February after the review. Despite being solid, the numbers came in below market expectations, with about 490 thousand vacancies.
The unemployment rate fell to 3.6%, the lowest level since February 2020, from 3.8% in February. Average hourly earnings rose 0.4% after rising 0.1% in February.
Employment data is important because the US Federal Reserve is one of the factors in evaluating the next steps in its monetary policy.
In the context of high inflation and job recovery, there is a tendency to tighten rapidly. Last month, the central bank raised the benchmark interest rate for the first time since 2018.
“The data is positive, but the disappointment of expectations brings a positive trend for the US Federal Reserve, which has been under a lot of pressure from continuous positive performance data,” said Carla Argentina’s CM Capital Chief Economist.
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Argentina points out that the lower-than-expected employment data was in line with inflation data released the previous day, which, although high, was in line with expectations. He also points out that this is the first important economic data considering the new reality imposed by the war between Ukraine and Russia. “The dollar has reacted lower, with the latest data showing that the market needs to adjust to its expectations.”
Felipe Sichel, ModelMais’ partner and chief economist, said the U.S. job market was tight, with unemployment rates falling in view of the strong growth in the number of participants and the acceleration of wages. Upward bias through wages and extension to medium-term inflation.
“We also emphasize that the job market continues to show signs of strength, which has led to a positive performance by the central bank,” Chichel said in a comment to clients. The model forecast for a 0.50 percentage point increase at the bank’s next monetary policy meeting in May.
On the geopolitical front, the market is waiting for the resumption of talks between Russian and Ukrainian representatives, which, despite showing progress, show no signs of resolving the conflict in the short term.
Domestically, the new increase in social contribution (CSLL) to net income collected from financial institutions such as banks is on the radar.
The plan seeks to offset the removal of President Jair Bolsanaro’s veto on plans to open a program to re-negotiate tax credits (Refis) for Simples Nationals and private entrepreneurs (MEIs).
Banks accelerated their losses in the last session of trading on Thursday (31) on news of a possible increase in CSLL.
Of the stocks, Petrobras common stock (PETR3, with voting rights) rose 0.06% and preferred shares (PETR4, non-voting rights) fell 0.39%. Vale’s common stock (VALE3) was up 1.42% and Ciderkika National (CSNA3) was up 0.23%. Usiminas’ preferred stock (USIM5) gained 0.93%.
In the financial sector, preferred shares of Itaú (ITUB4) were up 0.20% and shares of Prodesco (BBDC4) were down 0.90%. Companies linked to the local economy, once again, have been more profitable since the fall in futures interest rates. Shares of Méliuz Commonwealth (CASH3) rose 7.81% and that of Magazine Louisa (MGLU3), up 6.60%.
Oil futures contract prices are volatile this Friday, and Brent barrels are volatile ups and downs.
At 1:20 pm Brasilia time, the June contract was down 0.45% to $ 104.24 a barrel. The contract price for the WTI category for May fell 1% to $ 99.28 a barrel.
On Thursday, commodity prices plummeted after the US announced the release of 180 million barrels from the country’s strategic reserves.
Eurozone inflation hits new record
After the employment data, US stocks moved in opposite directions. At 1:30 pm in Brasilia, the Dow Jones Industrial Average was down 0.25% and the S&P was down 0.35%. On the Nasdaq, there was a decline of 0.39%. In Europe, stocks closed higher. The London Stock Exchange was up 0.30% and the Frankfurt Stock Exchange was up 0.22%. In Paris, there was an increase of 0.37%.
On the continent, the eurozone is the highlight of consumer inflation, which has surpassed expectations and recorded the highest level in the coalition’s history.
The annual rate of the consumer price index rose 7.5% in March to 5.9% in February. The figures were released by Eurostat, the European Union’s (EU) statistics agency.
Since the agency began measuring consumer prices in the region in January 1997, the February figure has already reached the highest level recorded by Eurostat.
The core index, excluding volatile energy and food components, rose 3% in March after rising 2.7% in the previous month. The data should put pressure on the European Central Bank (ECB) to take a more drastic stance on raising interest rates.
Asian stocks closed without any direction. The Tokyo Stock Exchange’s Nikkei index fell 0.56%. In Hong Kong, it was up 0.19% and in China, it was up 0.94%.
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