Ibovespa operates with volatility, in anticipation of interest rate decisions

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The main index of the Brazilian stock exchange fell 0.53%, to 118,758 points. During the week, it accumulated gains of 2.99%. Ibovespa is operating downwards, driven by abroad. Freepik Ibovespa, the main index on the São Paulo stock exchange, B3, operates with volatility this Monday (18), oscillating between highs and lows, with investors already waiting for decisions on interest rates in Brazil and the States States, which take place at central bank meetings on Wednesday (20). The market also reflects the new Focus Bulletin, a weekly report from the Central Bank of Brazil (BC), which provides projections on the country’s main economic indicators. This week, estimates for inflation fell and growth in economic activity rose. At 11:20 am, the index rose 0.38%, to 119,206 points. See more quotes. Last Friday (15), the Ibovespa closed down 0.53%, at 118,758 points. As a result, the index began to accumulate increases of: 2.99% in the week; 2.61% in the month; and 8.22% in the year. What’s moving the markets? What’s moving the markets? This is a week of great importance for the global economy, which marks the last monetary policy decisions for the third quarter of 2023. The most important of these decisions is that of the Federal Reserve (Fed, the American central bank), which announces its new rates interest rate next Wednesday (20). Currently, rates in the United States are between 5.25% and 5.50% per year, the highest level in more than two decades. If interest rates rise in the country, the yield on its public bonds also increases. As it is the largest economy in the world, these securities are considered the safest and, with greater profitability, attract more investors – which leads to a migration of foreign capital, increasing the value of the dollar against other currencies. However, there is no consensus in the market about what the decision will be. There are those who expect a new increase, but many experts are betting that the Fed should keep interest rates unchanged, as the latest inflation data came in line with projections. Also on Wednesday, the BC’s Monetary Policy Committee (Copom) meets to decide the new Selic, Brazil’s basic interest rate, currently at 13.25% per year. Unlike the United States, expectations here are that the Copom will promote another cut in interest rates, of at least 0.50% percentage points. The biggest expectation is, in fact, what the Copom will signal in its statement after the meeting: whether there will be new cuts in the Selic rate in the coming months and what their magnitudes will be. In addition to Brazil and the United States, investors are also keeping an eye on monetary policy decisions in other countries, such as China and Japan, this Friday (22). In this session, another thing that affects business is the Focus Bulletin. In this week’s edition of the report, economists consulted by the BC reduced their estimates for Brazilian inflation in 2023 and 2024. For this year, projections fell from 4.93% to 4.86%. For the next one, from 3.89% to 3.86%. The bulletin also brought an increase in estimates for the country’s Gross Domestic Product (GDP). In 2023, the market raised growth expectations from 2.64% to 2.89%. For next year, forecasts went from an increase of 1.47% to 1.50%. Abroad, the improvement in China’s economic indicators last Friday continues to boost business. The country’s retail sales and industrial production grew above expectations, raising the prospect that the world’s second largest economy is stabilizing.

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