See stock exchange and dollar quotes after Copom meeting – 03/23/2023 – Market

The Stock Exchange starts the day on a high this Thursday (23), after the BC (Central Bank) decision to maintain the basic interest rate at 13.75% per annum.

Maintenance was already expected by the market, but the statement released by the monetary authority pleased economists, who cite a tough stance, but which at the same time does not close doors to a possible Selic cut in the coming months.

At 10:50 am (Brasília time), the Ibovespa rose 0.42%, to 100,647 points. The spot commercial dollar also rose by 0.30% to R$5.252.

In the interest market, rates are on the rise, with investors revising their expectations for the Selic in the short term. At maturity for January 2024, the rate advanced from 13.02% at the close of this Wednesday (22) to 13.21. For January 2025, the rate rose from 12.05% to 12.24%. Upon maturity in January 2027, interest increased from 12.31% to 12.47%.

The Copom (Monetary Policy Committee) of the Central Bank did not give in to pressure from the government of Luiz Inácio Lula da Silva (PT) to reduce interest rates and maintained this Wednesday (22) the basic rate (Selic) at 13.75% per year.

Without adopting a milder tone, as expected by some analysts, the monetary authority has not given any signs that it intends to bring forward the rate cut – even maintaining the message about the possibility of raising it again if the disinflation process does not go as expected.

“In my view, the BC went against the expectations of more optimistic market agents, who expected a lighter tone and even an eventual anticipation of interest rate cuts for the short term”, says Idean Alves, partner and head of the board operations of Ação Brasil Investimentos.

The Minister of Finance, Fernando Haddad (PT), criticized the Copom (Monetary Policy Committee) decision to keep the interest rate at the current level of 13.75% per year and said he considered the tone of the communiqué “very worrying” Central bank.

For Rachel de Sá, head of economics at Rico Investimentos, the BC signals that it will maintain its policy as long as inflation is at levels above the target.

“For now, we maintain our projection of Selic stability at 13.75% until the end of the year. We recognize, however, the possibility of earlier cuts, depending on the evolution of financial shocks and the evolution of the Brazilian economy”, says the Economist at Rico.

Raone Costa, chief economist at Alphatree, says that BC models show that inflation should remain above the target until the third quarter of 2024.

“The only chance of cutting interest rates would be a deterioration in the global economy, due to the crisis in the financial system. At the moment, it is not the most likely scenario. The BC statement even increases the chance of new hikes in interest rates”, says Costa .

Nicola Tingas, chief economist at Acrefi (National Association of Credit, Financing and Investment Institutions) has a different view of the future trajectory of the Selic.

“My basic scenario is a drop in interest rates at the May or June meeting. The BC admits that it can review and make adjustments to the monetary policy if there are changes in the environment. We are seeing a growing default on credit, and companies are unable to have access to the capital market. The BC must be aware of this”, says Tingas.

This Thursday, an important fiscal data was released. Federal tax collection grew 1.28% in real terms in February over the same month last year, totaling R$ 158.9 billion, informed the Federal Revenue this Thursday.

In the first two months of 2023, collections totaled BRL 410.7 billion, an increase of 1.19% over the first two months of 2022, after discounting the variation in inflation.

In New York, stock indices are on the rise, recovering part of the losses recorded this Wednesday, after the statements by Jerome Powell, chairman of the Fed (Federal Reserve, the US central bank).

Technology companies stand out, with the Nasdaq index rising 1.32% at 10:50 am (Brasília time). Dow Jones and S&P 500 advanced 0.67% and 0.84%, respectively.