Ibovespa operates in decline, with negative exterior and framework in focus

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On the eve, the main index of the Brazilian stock market advanced 0.14%, to 106,163 points. B3 Headquarters Amanda Perobelli/Reuters The Ibovespa, the main index of the São Paulo stock exchange, the B3, operates in decline this Wednesday (19), with investors digesting details of the fiscal framework, with a focus on Vale’s results and with bad weather abroad due to the expectation of high interest rates in the United States and Europe. At 10:15 am, the index fell 1.42%, at 104,657 points. See more quotes. On the eve, the Ibovespa fell by 0.14%, to 106,163 points. With the result, the index started to accumulate a high of 4.20% in the month. In the year, however, it still has losses of 3.25%. Government delivers new fiscal rule project to Congress What is messing with the markets? In Brazil, the highlight is the evaluation of details of the new fiscal framework, delivered this Tuesday (18th) to the National Congress. The government bill lists a series of expenses that will not fall within the limits of the new rules. It also goes into more detail about the outcome targets and explains what happens if those targets are not met. g1 prepared a report with all the points. On the corporate agenda, investors evaluate Vale’s production and sales report. The company produced 66.77 million tons of iron ore in the first quarter of this year, up 5.8% compared to the same period in 2022, while sales fell amid restrictions on shipments. Sales of iron ore fines dropped 10.6% between January and March, compared to a year earlier, to 45.86 million tons, due to loading restrictions at the Ponta da Madeira Terminal, in Maranhão, with the impact of the rainy season in the formation of piles in stocks and unscheduled maintenance of port equipment. The international market started the day worried about the probability of hikes in interest rates in developed economies after inflation results in Europe and expectations for economic data in the United States. Atlanta Federal Reserve President Raphael Bostic said on Tuesday that the U.S. Federal Reserve is likely to have another interest rate hike ahead of it as it continues to work to curb high inflation. “One more move should be enough for us to take a step back and see how our policy is flowing in the economy, to understand the extent to which inflation is returning to our target,” Bostic said in an interview with CNBC. The chairman of the Federal Reserve in St. Louis, James Bullard, also said Tuesday that the Fed should keep raising interest rates based on recent data showing that inflation remains persistent, while the broader economy is expected to continue to grow, albeit slowly. “Wall Street is very invested in the idea that there will be a recession in six months or so, but that’s not how you would read an expansion like this,” he said in an interview with Reuters. “The job market looks very, very strong. And the conventional wisdom is that if you have a strong job market that fuels strong consumption… and that’s a big part of the economy… it doesn’t seem like the time to predict that there will be a recession in the second half of 2023,” he said. Euro zone inflation eased last month, but underlying readings remained high, Eurostat said. The rate fell from 8.5% to 6.9% in the annual window, mainly due to a rapid drop in energy costs, as natural gas prices continue to fall after the jump a year ago with the invasion of Ukraine by Russia. But European Central Bank (ECB) officials are now concerned that high energy costs have seeped into the wider economy. The persistently high core readings are why most ECB officials have already said that interest rates will need to keep rising, despite a record 350 basis points increase since last July. In the United Kingdom, inflation slowed down less than expected, making the country the only one in Western Europe with double-digit inflation in March. The rate has fallen to an annual rate of 10.1%, the Office for National Statistics said, down from 10.4% in February but well above the 9.8% forecast by economists polled by Reuters. Inflation, which hit a 41-year high of 11.1% in October, continues to erode the purchasing power of workers, whose wages are rising the least. The result reinforces bets that the Bank of England will raise interest rates again in May. Initial plugin text

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