See the dollar quote today, with the rise in oil – 03/04/2023 – Market

The dollar fell in the first deals this Monday (3), following the devaluation of the currency abroad amid the surge in oil prices, while investors monitor a meeting between the Minister of Finance, Fernando Haddad, and the president of the Central Bank, Robert Campos Neto.

For the remainder of the week, expectations should revolve around labor market indicators in the United States. As of this Tuesday (4th), data on job offers, creation of vacancies in the private sector, unemployment insurance requests will be released and, on Friday (7th), the broader report, known as Payroll, will be released. .

In Brazil, the agenda of indicators will be more emptied, including the Holy Friday holiday.

At 9:02 am (Brasília time), the spot dollar retreated 0.28%, to R$ 5.0555 in the sale.

On B3, at 9:02 am (Brasília time), the first contract dollar futures contract fell 0.21%, to R$ 5.0765.

The Stock Exchange closed lower this Friday (31), in the last trading session of the first quarter. In the end, the Ibovespa practically zeroed out the gains registered this Thursday (30), boosted by the disclosure of the new fiscal rules by the government.

The worsening in the perception of Brazilian economic activity accentuated the profit-taking movement, which would be natural after five consecutive hikes, according to analysts.

The dollar also fell for technical reasons, since the end of the month marks the closing of the Ptax rate, a quotation calculated by the BC that serves as a reference for the settlement of futures contracts. At the end of each month, financial agents usually try to direct it to more convenient levels for their positions, whether they are bought or sold in dollars.

The Ibovespa closed down 1.77% to 101,882 points. Thus, the index ended the month of March with an accumulated drop of 2.9%. The spot commercial dollar ended the day with a drop of 0.54%, at R$ 5.069. In the month, the currency also lost almost 3% of its value against the real.

In the interest market, rates have risen again, after the declines of this Thursday. In contracts maturing in January 2024, interest increased from 13.15% to 13.20%. For January 2025, it increased from 11.95% to 12.02%. Upon maturity in January 2027, the rate was closer to stability, changing from 12.08% to 12.10%.

Morgan Stanley has revised downwards all its projections of economic indicators for Brazil in 2023. The American bank expects GDP growth of 1% (Gross Domestic Product), compared to the previous forecast of 1.4%.

Among the data monitored by the bank, only government consumption was revised upwards, from an increase from 1.1% to 1.4%. In household consumption, the projected advance changed from 1.4% to 1%, and for investments, Morgan Stanley started to project a 5% drop, compared to the previous forecast of a 2.7% drop.

“The slowdown in credit supply and the worsening in business confidence led us to project weaker growth for Brazil in 2023”, say analysts.

Morgan Stanley points out other episodes outside the macroeconomic environment that will influence Brazil’s growth capacity in 2023. “The judicial recovery of Americanas and the reduction in the payroll interest rate may further deteriorate the credit environment, even if temporarily” , says Morgan Stanley.

Another economic data released this Friday helped to worsen this perception about the Brazilian economy. After six quarters of decline, the unemployment rate rose again in the country, closing the quarter ended in February at 8.6%. In all, there are 483,000 unemployed more than in the quarter ended in November 2022.

Although the IBGE (Brazilian Institute of Geography and Statistics) assesses that it is still not possible to identify the effects of the economic slowdown on the indicator, the market expects that unemployment will continue to rise in the coming quarters, with the worsening of the conjuncture.

As a result, the sectors that suffered the most on the Stock Exchange this Friday were those that depend on domestic demand. “The most affected sector is the retail sector, showing great profit taking from positions set up this week and the current moment of high interest rates”, says Lucas Caumont, investment strategist at Matriz Capital.

Among the main falls on the Ibovespa this Friday were the common shares of Grupo Soma (-7%) and Lojas Renner (-6.07%). The shares of Petz and Magazine Luiza fell 5.20% and 3.78%, respectively.

Investors continued to digest this Friday the government’s proposal for the new fiscal rule, which will have a lock to prevent federal spending from growing more than revenue, but will also have a minimum limit for the evolution of expenses, which will always grow above of inflation.

The day after the presentation of the project, Minister Fernando Haddad (Finance) received representatives from the financial market and productive sectors in São Paulo.

The meetings, seven in total, were scheduled in advance to deal with various matters, including the new fiscal rule and the expected tax reform.

Stock indices in the United States closed higher, after the slowdown in consumer inflation in February.

The PCE, the preferred measure of prices by the Fed (Federal Reserve, the US central bank), rose 0.3% last month, compared to an estimate of 0.4% made by economists polled by Bloomberg. Consumer spending fell 0.1% after rising 1.5% in January. In 12 months, the PCE decelerated from 5.4% to 5%.

The Dow Jones index closed this Friday at a high of 1.26%. S&P 500 and Nasdaq advanced 1.44% and 1.74%, respectively. The shares of technology companies benefit most from this scenario of decelerating inflation, with the prospect that the cycle of high interest rates may be close to the end.