Follow the dollar exchange rate and the Stock Exchange session today (8) – 02/08/2024 – Market

The dollar opened higher against the real this Thursday (8). At 10:47 am, the American currency rises 0.24%, to R$4.9799. The Ibovespa falls 0.15%, to 129,744 points.

Investors reflect the IPCA (Broad National Consumer Price Index) of January. Brazil’s official inflation slowed to 0.42% after reaching 0.56% in December, according to data released by IBGE (Brazilian Institute of Geography and Statistics) this morning.

The expectation of analysts consulted by the Bloomberg agency was for a smaller variation, of 0.34%, in the first month of this year.

“In general, inflation remains under control, but there are some warning signs; the composition of the IPCA had a slight qualitative worsening,” said Gustavo Sung, chief economist at Suno Research. “For monetary policy, this data should not change the flight plan already announced by the Central Bank, of cuts of 0.5 percentage points in the next meetings.”

Market participants have said that the prospect of maintaining the pace of monetary easing by the BC, with no room for acceleration of cuts, could work in favor of the real, since, in this way, the Selic will remain at a restrictive level for a long time, despite the flexibility.

High interest rates in Brazil make the real more attractive for use in “carry trade” strategies, which consist of taking out a loan in a country with low rates and investing this money in more profitable markets.

Another point of attention in the market is the position of members of the Fed (US central bank) on the cut in US interest rates.

The day before, Fed authorities reinforced that more data is needed to have certainty about the path of inflation and room for interest cuts.

Recently, following more cautious signals from Fed officials, including Chair Jerome Powell, and stronger-than-expected U.S. employment data, U.S. interest rate futures traders reduced bets that the start of monetary easing would be in March. This in turn has strengthened the dollar globally.

On Wednesday (7), the North American currency closed with an increase of 0.11%, quoted at R$4.967. Wednesday’s session was one of relative stability, as traders waited for more information about the Fed’s monetary policy (Federal Reserve, the central bank of the United States) to change their position.

Adriana Kugler, director of the monetary authority, stated that she is “optimistic” about the fall in inflation, but that policymakers need to be more certain that the trajectory is confirmed before reducing interest rates.

“I will remain focused on the inflation side of our dual mandate until I am confident that inflation is lastingly returning to our 2% target,” Kugler said in her first monetary policy speech since joining the Fed board in Washington, in September.

The messages did not bring much news, and the session followed the external news, where the US currency showed mixed signals.

In the stock market, the stock exchange closed down 0.36%, at 129,952.56 points, driven by the meltdown of 15.66% of Bradesco shares after the release of the 2023 balance sheet frustrated investors.

The bank announced a recurring net profit of R$16.297 billion in 2023. The number is 21.2% lower than that recorded in 2022, when the company’s result also shrank by 21%, to R$20.7 billion, and also came below market estimates of R$18.09 billion. Bradesco lost R$24.1 billion in market value in the trading session.

Itaú also closed lower, at 0.72%. The movement reversed part of Tuesday’s gains, when it announced a net profit of R$35.6 billion last year in the corporate balance sheet.

Among Wednesday’s highs, Petrobras (0.95%) and Vale (0.19%) stood out, the two companies with the greatest weight in the Ibovespa.

The oil company advanced after the president of the state-owned company, Jean Paul Prates, said he planned to invest more than US$100 billion in offshore exploration and production. As he told the Financial Times, the focus on the oil company’s main business will be maintained. The appreciation of the barrel of Brent oil abroad also helped to boost the shares of Petrobras and peers in the sector.

Vale surfed the rise in iron ore futures in China, after Beijing signaled that authorities were intensifying efforts to support markets.

Leading the rises were Petz (9.49%), Locaweb (4.95%), Atacadão (4.39%) and Casas Bahia (4.35%).

(With Reuters)