The exchanges are running directionlessly with catalysts in China and waiting for inflation in the US; IPCA indicates contraction and more highlights
6 min read
Futures indices of the United States and stock markets in Europe are trendless on Tuesday (11), on the eve of the release of the US Consumer Price Index (CPI, its English abbreviation) for June. The Refinitiv consensus points to a 0.3% monthly variation of the full index between May and June, which represents an acceleration compared to the last CPI reading.
US consumer inflation should help investors calibrate their interest rate bets, pointing to another hike or two this year.
On Monday (10), Fed officials, including Bank of San Francisco President Mary Daley and Loretta Mester of Cleveland, expressed the need for more rate hikes to bring inflation down to target. from the central bank.
In Europe, UK wage data showed growth at its fastest rate on record in the three months through May, rising 7.3% from the same period last year, deepening concerns about entrenched high inflation.
In Asia, the session was mostly bullish. It was announced that China will extend its supportive fiscal policies for its real estate market until the end of 2024. In a notice, the People’s Bank of China referred to the 16-step guidelines issued last November to strengthen policy support for the real estate sector.
Read also
Here, the June Extended Consumer Price Index (IPCA) is supposed to show contraction month on month. Refinitiv consensus expects -0.10% change from May.
In the political arena, Eduardo Braga (AM), one of the potential rapporteurs of the tax reform proposal in the Senate, said in an interview with Estadão that there is a possibility of “splitting” the proposal during the text processing process at home.
1. Global Scholarships
we
US index futures worked head-to-head on Tuesday morning, after breaking a three-loss streak the previous day.
The June Consumer Price Index, due on Wednesday, as well as the June Producer Price Index, due Thursday, will show whether the decline in inflation has sustained and will leave more clarity on the likely directions of the Fed’s monetary policy.
Investors expect another quarter-point rise at the central bank’s July 25-26 meeting, but are hesitant about what the Fed will do at its September meeting after last week’s strong employment data added to anxiety. .
Watch how the futures markets performed:
- Dow Jones Futures (US), -0.16%
- S&P 500 (US) Futures, -0.05%
- Nasdaq Futures (US), +0.05%
Asia
Asian markets closed higher, after Wall Street’s positive move in the previous session, when US markets broke a three-day losing streak.
The People’s Bank of China will extend two fiscal policies to support the real estate market until the end of 2024.
Australia’s Westpac-Melbourne Institute Consumer Confidence rose 2.7% to 81.3 from a June reading of 79.2, according to a statement released on Tuesday.
- Shanghai SE (China) +0.55%
- Nikkei (Japan), +0.04%
- Hang Seng Index (Hong Kong), +0.97%
- Kosby (South Korea) +1.66%
- ASX 200 (Australia), +1.50%
Europe
European markets are mixed, with the FTSE 100 falling in the spotlight. It comes after UK wage data showed growth at its fastest rate ever in the three months to May, up 7.3% over the same period. last year, deepening concerns about entrenched high inflation.
The country’s tight labor market showed signs of easing with the unemployment rate unexpectedly rising from 3.8% to 4% in the three months through April, while job vacancies continued to decline.
The Bank of England (BoE) has repeatedly warned that high wage growth remains a major impediment to its efforts to curb inflation.
- FTSE 100 (UK), -0.33%
- DAX (Germany), -0.04%
- CAC 40 (France), +0.47%
- FTSE MIB (Italy), -0.05%
- Stokes 600 + 0.12%
goods
Oil prices rose slightly as investors focus on supply cuts from the world’s two largest oil exporters, Saudi Arabia and Russia, and await data that could help determine demand.
Prices fell 1% on Monday on expectations of a pick-up in US interest rate hikes and as investors took profits after last week’s 4.5% rise.
- WTI, +0.30%, at $73.21 a barrel
- Brent Crude Oil, +0.19%, at $77.84 a barrel
- Iron ore traded on the Dalian Stock Exchange rose slightly by 0.06% to 807.00 yuan, equivalent to 112.01 US dollars.
bitcoin
- Bitcoin, -0.64% at $30,485.00 (24 hours ago)
2. Schedule
The docket on Tuesday will release the June Expanded Consumer Price Index (IPCA) for release on Tuesday (11) and will show contraction month on month. Refinitiv consensus expects -0.10% change from May.
UBS expects a 0.13% slowdown, which would bring the 12-month IPCA to 3.11%. According to analysts at the bank, the prices of new cars and fuel should contribute to a reduction of 20 basis points in the index. Core inflation should also show some deceleration. The bank expects the IPCA to end in 2023 at 4.7%.
Brazil
9 am: Expanded Consumer Price Index (IPCA), Refinitiv forecast -0.10% compared to May and +3.17% yoy
9:30 a.m.: Finance Minister Fernando Haddad met with Union Controller General Minister Vinicius de Carvalho.
11 a.m.: Haddad meets with Senate President Arthur Lyra
3:00 PM: Haddad met with Clara Ant – Special Adviser to the Presidency of the Republic
5 pm: Haddad met with Jorge Gerdao – President of the Supreme Council of the Brazilian Competitive Movement
7 pm: Haddad met with Maryam Belchior – Executive Secretary of the Civil House of the Presidency of the Republic
United States of America
10 a.m.: Speech by Federal Reserve Chairman Ste. Lewis, James Pollard
3. Economic news
Tax reform can be divided in the Senate
The leader of the MDB in the Senate, Eduardo Braga (AM), one of the potential rapporteurs of the tax reform, told the Estadão newspaper that there is a possibility that the proposal could be “divided” – that is, divided into two parts – during the introduction of Proposal to Amend the Constitution (PEC) 45 in the Chamber of Deputies.
He reasoned that this was a complex subject and that I needed to ensure that one text would not depend on another in order for it to make sense.
The proposal under discussion among senators aims to speed up the vote to approve the part of the text that has passed through the House where there is agreement. Issues on which there is no consensus will be discussed in the second parallel General Elections Committee.
4. Political news
CPMI on 8 de Janeiro hears Mauro Cid this Tuesday
The Joint Parliamentary Commission of Inquiry (CPMI) investigating the criminal acts of January 8 will resume its work this Tuesday (11), with the testimony of Lieutenant Colonel Mauro Cid, former aide to Jair Bolsonaro (PL). The session was scheduled for nine in the morning.
The testimony was initially scheduled to be given last week, but was delayed due to a focused effort in the House of Representatives to vote on tax reform.
Minister Carmen Lucia, of the Supreme Federal Court (STF), has decided that Mauro Cid is obliged to testify before the Committee for the Protection of Civilians. He can be accompanied by lawyers and has the right to remain silent so as not to answer incriminating questions.
5. Corporate Radar
Petrobras (PETR4)
Petrobras (PETR4) started on Monday (10) The due diligence process, according to the rules set forth in the Braskem Shareholders’ Agreement signed between the state-owned company and Novonor SA, for the final exercise of the trademark or protective rights, in the event of the sale of shares owned by Novonor SA in the company.
The state-owned company points out that there has been no decision from the Executive Board or the Board of Directors regarding the process of divestment or further participation in Braskem, this is just a necessary step in terms of long-term and pre-emptive label rights.
TIM (TIMS3)
tim (TIMS3) that it will submit, through July 12, 2023, Payment of interest on private capital (JCP) in the amount of R$ 290 million.
The amount is equivalent to R$0.119795497 per share issued by the company.
The payment initially scheduled for July 25, 2023 maintains the terms originally reported, with June 22, 2023 being the date for determining which shareholders are entitled to receive these payments. Thus, the shares acquired after this date are the right of interest distribution.
(with Estadão, Reuters and Agência Brasil)
“Entrepreneur. Music enthusiast. Lifelong communicator. General coffee aficionado. Internet scholar.”
