June 29, 2022
Tesoro Diretto: Government bond advances and interest rates on some fixed-rate securities are approaching levels seen in October 2021

US futures rise after sharp drop in April; Brazil GDP preview and more highlights in today’s market

New York futures rose with European shares trading lower on Monday morning, with investors watching monetary policy tightening, inflation data and weak data from China.

Investors are looking forward to Wednesday, when the Federal Open Market Committee will release a statement on monetary policy. The decision will be released at 3:00 PM (Brazilian time), with Federal Reserve Chairman Jerome Powell holding a press conference at 3:30 PM.

The Federal Reserve is expected to raise interest rates by 0.5 percentage point on Wednesday. The question is how far you should go to contain hyperinflation and whether it will lead to a recession.

Another important economic indicator will be released on Friday when the jobs report for April is released.

Asian markets slipped, as data released over the weekend showed Chinese factory activity shrank in April.

Factory activity in China slowed more sharply in April as Covid shutdowns affected industrial production, according to data released over the weekend.

Meanwhile, investors continue to monitor the war in Ukraine and its geopolitical ramifications. European Union leaders are expected to act on a Russian oil embargo this week. Over the weekend, the United Nations and the International Committee of the Red Cross began evacuating civilians from the besieged port city of Mariupol. This process is expected to continue on Monday.

In Brazil, there is the IPC-S and the FGV Entrepreneur Confidence (both 8:00 AM), as well as the important IBC-Br of the Central Bank (9:00 AM) and the National Public Sector result (9:30 AM) including the debt-to-debt ratio. Brazil is still disclosing the trade balance (15 hours).

Balance sheet season continues with the release of Copasa (CSMG3) and Localiza (RENT3) results after the market closes.

Check out more highlights:

1. Global Scholarships

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US futures were trading higher this morning after the Nasdaq posted its worst month since 2008, pressured by higher interest rates, rampant inflation and lower-than-expected earnings from some of the biggest technology companies.

The S&P 500 is down 13% year-to-date on Friday, its worst drop in the first four months of the year since 1939.

Attention is focused on Super Wednesday, the fourth, and the Federal Open Market Committee will raise the US interest rate by 0.5 percentage points, to the range between 0.75% to 1%. The decision is more than its price, but the future is in doubt. Investors are waiting for the statement to see if the Fed will tighten its grip further. Another expectation is the pace of the balance sheet reduction, which is supposed to start in a few weeks.

Watch the performance of futures markets:

  • Dow Jones Futures (USA), +0.17%
  • S&P 500 futures contract (US), +0.12%
  • Nasdaq Future (US), +0.25%

Asia

Asian markets closed in the red, as data released over the weekend showed Chinese factory activity contracted in April.

Data from the National Bureau of Statistics on Saturday showed that the official manufacturing PMI for April fell to 47.4, the second straight month of contraction after March’s reading of 49.5.

A private survey also showed a contraction in Chinese manufacturing activity, with the Caixin/Market manufacturing PMI coming to 46, down from the previous month’s reading of 48.1.

Markets in Hong Kong, mainland China, Singapore and Taiwan are closed on Mondays for a public holiday.

  • Shanghai SE (China), closed for public holidays
  • Nikkei (Japan), -0.11%
  • Hang Seng Index (Hong Kong), closed for public holidays
  • Kospi (South Korea), -0.28%

Europe

European markets are lower after weak China data as investors monitor monetary policy and inflation data. Britain’s FTSE 100 is closed for a holiday and trading volumes are expected to be affected.

German retail sales on Monday morning showed an unexpected decline in March. The Federal Statistics Office said sales fell 0.1% on a monthly basis in real terms.

  • FTSE 100 (UK), closed on public holidays
  • Dax (Germany), -1.22%
  • CAC 40 (France), -1.69%
  • FTSE MIB (Italy), -1.58%

goods

Oil prices recorded a bearish session between expectations of lower demand with a shutdown in China and a drop in supply with the expectation of a ban on Russia.

  • West Texas Intermediate crude, -2.82% at $101.73 a barrel
  • Brent crude rose 2.58% to $104.38 a barrel

Bitcoin

  • Bitcoin+1.25% to $38,935.19 (24 hours ago)

2. Schedule

The first week of May will be busy with monetary policy decisions by the Federal Open Market Committee (Fomc) of the Federal Reserve and the Monetary Policy Committee (Copom) of the Central Bank of Brazil.

In Copom’s case, economists expect the central bank to raise the interest rate to 12.75% at the next meeting, highlighting the committee’s next steps. Despite the perception that the tightening cycle is coming to an end, it is not excluded that the committee will keep the door open for a more prolonged rise in the core price with inflation remaining at a level not in line with the target.

Read also: Fomc and Copom Decisions, US Employment and Petrobras and Bradesco Results

On the other hand, the FOMC should speed up the move to adjust monetary policy and raise interest rates by 0.5 percentage points amid persistent inflation. In addition to the decision, markets should closely follow the conference of the corporation’s president, Jerome Powell, after more stringent signals about interest rates he gave at the end of last month affected the market.

Brazil

8:00 am: weekly IPC-S

8:00 am: Business confidence

9 a.m.: February IBC-Br, with Refinitiv forecast 0.5% monthly

9:30 am: Consolidated preliminary result for the public sector

10 a.m.: Focus Bulletin

10:00 am: Monthly Manufacturing PMI

3 p.m.: Trade Balance

United States of America

10:45 am India time

11:00 am: Change of monthly construction expenses

3. May Day features pro-Lula and pro-Bolsonaro actions

Last Sunday (1), the May Day holiday, protesters took part in actions in favor of President Jair Bolsonaro (PL) and Lula (PT).

After the controversy, Lula apologized to the police at an event with unions in the SP, as well as defended his achievements as president and criticized Bolsonaro,

Supporters of President Jair Bolsonaro gathered Sunday afternoon on Avenida Paulista, in São Paulo, in an action he called against the Southern Transitional Union and in defense of Federal Representative Daniel Silvera (PTB-RJ). As in the Brasilia demonstration, in which Bolsonaro quickly participated, the demonstrators demanded the resignation of the STF ministers.

Bolsonaro began live on a big screen on Avenida Paulista and said the demonstrations were in defense of “the constitution, family and freedom.”

The STF considers the actions against the court voided and Bolsonaro’s participation reduced

As for STF ministers, the expectation that the businesses called by Bolsonaristas will be emptied on Sunday has been confirmed, Bela Megale/Globo reports. The STF’s intelligence district, which also monitored the demonstrations, had already indicated that compliance would not be high and that the protests should take place “without any problems”. His aides strongly advised President Bolsonaro not to participate in the demonstrations. He even attended the event in Brasilia, but did not comment. At the event in Sao Paulo, he made a short video post.

Pacheco criticizes actions against STF

The President of the Senate, Rodrigo Pacheco, said that Bolsonaro’s demonstrations against the Federal Supreme Court are illegal, undemocratic and distort the celebration of Labor Day.

BC servers resume strike from tomorrow

Central Bank Servers I decided to resume the strike indefinitely Starting next Tuesday 3 after the suspension of April 20 to May 2 in an effort to advance negotiations with the municipal council and government.

4. Covid

And last Sunday (1), Brazil recorded 16 deaths and 6,143 cases of Covid-19 virus within 24 hours, according to information from the Media Union, at 8 pm.

The 7-day moving average of Covid deaths in Brazil is 124, up 26% compared to the level of 14 days before that.

The seven-day moving average of new cases was 14,906, which is a 5% increase over the level 14 days ago.

It reached 164,029,566 people fully vaccinated against Covid in Brazil, equivalent to 76.35% of the population.

The number of people who received at least the first dose of vaccines was 177,204,720, representing 82.49% of the population.

The booster dose was given to 8,632,010 people or 40.18% of the population.

5. Corporate radar

Copasa (CSMG3), Intelbras (INTB3), Localiza (RENT3), Lojas Quero-Quero (LJQQ3), Marcopolo (POMO4), Neogrid (NGRD3) and Pague Menos (PGMN3) releases, all after markets closed.

he moved (3 . movie)

Movida (MOVI3) reported net income of R$258.1 million in the first quarter of 2022, up 135.7% year-on-year.

Ebitda totaled R$863.1 million, an increase of 183.4% over the same period in 2021.

Braskem (BRKM5)

Braskem reported that sales of resin in the Brazilian market declined by 7% compared to the first quarter of 2021, to 885 thousand tons, while increasing by 2% compared to the immediate previous quarter.

Resin exports totaled 215,000 tons between January and March, up 25% from the same period last year and down 16% from the immediate prior quarter.

JBS (JBSS3)

JBS (JBSS3) has announced the acquisition of two frozen food plants in the Middle East, one in Saudi Arabia and the other in the United Arab Emirates. The company has also established its own distribution network with three local partners to deliver products to both countries, as well as to Kuwait.

CPFL (CPFE3)

CPFL has agreed to pay a dividend of approximately R$3.7 billion, equivalent to R$3,422,80516 per share – in two equal instalments. The first will be paid by June 30 and the second by December 30.

The exact date for the deposit of funds has not been set, but the company has already warned that those who were in the company’s shareholding base last Friday (29) will be entitled to the proceeds.

Bradspar (BRAP4)

Bradespar (BRAP4) will pay out a dividend of R$600 million, with 1.433324328 per common share and R$1.576656761 per preferred share, to be paid on May 10.

Shareholders who hold Bradespar shares are entitled to payment until April 29.

tropical (EQTL3)

Equator (EQTL3) has agreed to pay R$704 million in dividends, equivalent to R$0.64 per share, to be paid by the end of 2022.

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