See stock exchange and dollar quotes this Wednesday – 03/08/2023 – Market

The dollar fell against the real in the first deals this Wednesday (8). The market is waiting for statements on the second day of the hearing of Jerome Powell, chairman of the Federal Reserve (Fed, the US central bank) in the US Congress.

An indicator long awaited by investors is the Jolts report. It brings numbers on job offers in the American private sector, and is considered a preview of the Payroll, the broader report on the job market in the country, which comes out next Friday (10).

At 9:09 am (Brasília time), the spot dollar retreated 0.36%, to R$ 5.1750 in the sale.

On the B3, at 9:09 am (Brasília time), the first contract dollar futures contract fell 0.38%, to R$ 5.2000.

The Stock Exchange closed low and the dollar high on Tuesday (7). The speech by Jerome Powell, president of the Fed (Federal Reserve, the US central bank) in Congress increased the caution of investors, projecting that interest rates in the United States will reach a higher level than expected by the monetary authority itself.

The Ibovespa closed down 0.45% to 104,227 points. The spot commercial dollar closed up 0.54%, at R$5.194.

In the futures interest market, rates are falling, pending definitions on topics such as tax reform and fiscal framework. In contracts for January 2024, the rate went from 13.27% per annum at the close of this Monday (6) to 13.25%. Upon maturity in January 2025, interest dropped from 12.70% to 12.65%. At maturity in January 2027, the rate fell from 13.10% to 13.01%.

The Brazilian market had a less negative performance than that seen in the American indices. Mainly due to the performance of banks, with emphasis on Bradesco shares, with preferred shares up 2.33%. The common shares of Banco do Brasil advanced 2.29%.

At a hearing in the US Congress this Tuesday, Powell said that the Fed should raise interest rates to a level above what the monetary authority itself had expected.

“The latest economic data came in stronger than expected, which suggests that the ultimate rate level may be higher than previously anticipated,” Powell said in prepared remarks for a hearing before the Senate Banking Committee.

While inflation “is moderating” from its peak last year, Powell said, “the process of bringing inflation down to 2% has a long way to go and is likely to be bumpy.”

The Fed chairman urged US lawmakers to raise the national debt ceiling to avoid the unforeseen consequences of not doing so.

“There is only one solution to this problem,” Powell said. “Congress really needs to raise the debt ceiling” and “if we don’t, the consequences are hard to estimate, but they could be extraordinary.”

The White House will not interfere with the Fed’s handling of US inflation, a US administration official said when asked about Powell’s comments.

However, the official said it was important to remember that January’s strong employment data represents only one month of information and attention needs to be paid to new data due later this month. “People need to sit down and breathe.”

The numbers prove the effect that the Fed chairman’s speech had on the interest rate market. US Treasury bond rates maturing in 2 years topped 5% for the first time since 2007 on Tuesday.

Rates on 10-year bonds also rose on Tuesday, reaching 3.98%. This difference between the two bonds, greater than 1 percentage point, indicates that the American economy will enter a recession soon. Analysts project that this movement could start as early as the end of 2023.

Stock indexes in New York fell more than 1%. The Dow closed down 1.72%. The S&P 500 fell 1.53%. The Nasdaq ended down 1.25%.

The effects also appear in the exchange rate. The DXY index, which measures the dollar’s performance against a basket of globally relevant currencies, was up 1.23% around 6:30 pm (Brasília time). This is the indicator’s biggest daily advance since September 2022.

With Reuters