Ibovespa opens higher, after interest rate decisions in Brazil and the US come in line with market expectations

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The day before, the main index of the Brazilian stock market fell 0.13%, to 101,797 points. Ibovespa operates in decline this Wednesday. Pixabay The Ibovespa, the main index of the São Paulo stock exchange, the B3, opened higher this Thursday (4th), with investors echoing monetary policy decisions in Brazil and the United States, both in line with what was expected by the market. At 10:05 am, the Ibovespa rose 0.82%, to 102,630 points. See more quotes. The day before, the index fell 0.13%, to 101,797 points. With the result, the Ibovespa started to accumulate: Decrease of 2.40% in the week and in the month; Reduction of 7.12% in the year. What is messing with the markets? On Wednesday night (4), the Copom of the Central Bank of Brazil (BC) maintained the Selic rate at 13.75% per annum, the same level since August last year. According to André Meirelles, director of Allocation and Distribution at InvestSmart XP, the announcement given by the committee was also in line with the expectations of analysts and investors, without giving “openness to a possible drop in interest rates at the next meeting”. “Recalling that the market’s expectation is that the cycle of falling interest rates will happen from the second half of this year, if inflation expectations settle down”, points out Meirelles. Economists at BTG Pactual point out that the communiqué made few changes in relation to what had already been said, with the exception of the last sentence, “adding that, ‘although less likely’, the committee will not hesitate to raise interest rates if the disinflation process does not proceed as expected”. Currently, projections for inflation in 2023 are 6.1%, according to the latest edition of the BC’s Bulletin Focus. The inflation target for this year is 3.25%, with a margin ranging from 1.75% to 4.75%. ANBIMA’s Macroeconomic Consultative Group, however, considers that expectations for lower inflation should start to appear in the second half of the year, following the probable economic slowdown brought about by high interest rates. Abroad, the Fed also did what was expected by the market and raised interest rates by 0.25%, to a level between 5.00% and 5.25% per annum. According to Meirelles, what caught the attention of investors was that the Fed removed from its statement the paragraph that said that some additional tightening of monetary policy could be appropriate in the coming months, implying that the cycle of interest rate hikes may be close to the end. “Some factors such as the latest weaker activity data, the apparent trend of stabilization in prices and the tightening of credit may open space for stabilization of interest rates in the next meetings, despite the job market still being heated”, highlights the expert. In the euro zone, the European Central Bank also raised, this Thursday, interest rates by 0.25%, to a level between 3.25% and 4.00% per annum. In the statement, the institution claims that the increase is an attempt to curb “very high inflation for a long time”. Initial plugin text

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