Ibovespa returns to 131 thousand points, with IPCA-15 below expectations; dollar operates in decline

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The day before, the North American currency fell 0.23%, quoted at R$4.9810. The main stock index on the Brazilian stock exchange ended up 0.15%, at 129,609 points. Panel shows market variation at B3, in São Paulo. Amanda Perobelli/Reuters Ibovespa, the stock exchange’s main stock index, operates at an increase this Tuesday (27), again close to 131 thousand points. The dollar is already falling. Investors are responding to the release of the preview of Brazilian inflation, which was lower than expected by the financial market, in addition to a more benign day abroad, with a drop in the yields on North American Treasuries (United States Treasury bonds). Corporate balance sheets are also on the radar. See below for a summary of the markets. Dollar At 3:08 pm, the dollar was down 0.92%, quoted at R$4.9351. See more quotes. The day before, the North American currency fell 0.23%, trading at R$4.9810. With the result, it accumulated: drop of 0.23% in the week; increase of 0.89% in the month; increase of 2.65% in the year. Ibovespa At the same time, Ibovespa was up 1.49%, at 131,536 points. The day before, the index rose 0.15%, to 129,609 points. With the result, it accumulated: increase of 0.15% in the week; increase of 1.45% in the month; decline of 3.41% in the year. READ ALSO CASH OR CARD? What is the best way to take dollars when traveling? DOLLAR: When is the best time to buy the currency? Understand what makes the dollar rise or fall What is moving the markets? Among the main highlights this Tuesday (27) was the Broad National Consumer Price Index 15 (IPCA-15) — considered the preview of the country’s official inflation. The indicator registered a 0.78% increase in prices in February, reported the Brazilian Institute of Geography and Statistics (IBGE). The month of February is usually heavily influenced by a seasonal increase in the Education group, due to school readjustments. The segment had an increase of 5.07% in the month and an impact of 0.30 percentage points (pp) on the general index. Thus, the index had a strong acceleration of 0.47 pp compared to the previous month, when it increased by 0.31% for January. With the results, the IPCA-15 accumulated 4.49% in the 12-month window. The numbers came in below financial market expectations. Expectations were for an increase of 0.82% in February, reaching 4.53% in 12 months. The financial market expected an even more intense increase than what was found by IBGE in February. Despite the slightly lower full number, the openings did not alleviate analysts’ concerns. “Despite the positive surprise with the data, its opening continued to reflect a relatively poor quality, with underlying measures and relevant cores for the BC running at high levels”, says João Savignon, head of macroeconomic research at Kínitro. The analyst considers, however, that part of the factors have seasonal issues, with a cooling down in the coming months, concentrated in Food and Industrial Goods. “The BC can continue with cuts of -50bps per meeting, slowing down only in the second half of the year, between the 3rd and 4th quarters. Our base scenario is a terminal Selic of 8.5%”, he states. In the US, the market continues to await important economic data that will be released throughout the week. The main one is the core PCE prices for January, in the United States, scheduled for Thursday (29). This reading will come after data recently showed signs of resilience in activity and inflation in the world’s largest economy, leading markets to postpone bets on the start of monetary easing in the US. At the same time, helping the real, iron ore futures jumped this Tuesday, supported by hopes of a recovery in demand in China, the ore’s main consumer market, and by a possible export tax on Indian iron ore low quality. Both the Brazilian currency and the stock market are very sensitive to the prices of this commodity, since iron ore is one of the main components of the national export basket.

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