Ibovespa renews worst year-end result for fear of financial risk; The dollar reached 5.57 Brazilian reals

Sao Paulo – No Armistice, Cannes Ibovespa It suffered another day of losses and ended the session on Thursday (11) with the lowest close in more than a year. Today it did not bring news to encourage investors, on the contrary – it only increased concerns about financial risks, which have been affecting the market for some time.

Conversations on the PEC dos Precatórios suggest that the text approved in two chambers rounds, without many amendments, must undergo drastic changes in the Senate, where members of Congress are already considering removing the jurisdictional debts of the Teto dos Gastos government. Next week, the text to be discussed at the CCJ should be a jumble containing amendments proposed by senators and not quite in line with what was initially intended.

With the PEC, the government wants to fund the amendment in the part of Auxílio Brasil, a replacement for Bolsa Família, and to postpone the payment of court orders. However, in the alternative proposals that arrived at the decision of the matter, the idea was to pay the advance amount, to finance the Brazilian aid and not to dismantle the expenditure ceiling (since the repayment of judicial debts, exceptionally, will be calculated separately).

From a financial standpoint, there are positive elements to the proposal made by the three senators. The issue of paying the introductory fees off the ceiling would not be bad news for the markets, as the rule will remain and these expenses are dealt with exceptionally. From a political point of view, however, there are some hurdles involved, says the team of analysts at Levante Ideia de Investimentos.

The economic team has already stated that it does not agree with the alternative proposal and that the lack of understanding has once again strained investors.

“The Senate’s demonstrations of not wanting to pass the Presidential Election Commission the way the government intended is also a sign that other reforms are unlikely to pass Congress. But if the government shows it has the strength to pass something ‘heavy’, there is a chance we will have a year More productive in 2022 and even we have an upward revision to GDP, explains Fabrizio Filoni, chief economist at Corretura Front.

The Ibovespa index closed down 0.51% to 10,426 points. The trading volume on the day amounted to 28.4 billion Brazilian Real. It was the index’s lowest closing score since November 6, 2020. Ibovespa futures traded down 0.55% to 103,130 points in late trading today.

Vale shares (VALE3) moved the largest volumes of the day and were also among the biggest declines in today’s session. The newspapers ended the day at a low of 4.11% at R$62.33. The company’s performance was pressured by iron ore, whose prices fell to their lowest level in more than a year: On the Dalian Stock Exchange, the commodity closed 5.1%, at $80.21, still lower in first Friday trading.

The trading dollar rose again strongly in today’s session and closed up 0.83% to R$5.569 when buying and R$5.570 when selling. Dollar futures due in December 2021 rose 0.51% to R$5.568 near the close.

In the interest rate futures market, the DI for January 2023 rose 14 basis points to 12.16%; January 2025 DI increased 10 basis points to 12.09%; The DI for January 2027 increased by six basis points, at 11.96%.

Abroad, concerns about a new wave of Covid-19, with the number of cases increasing, are pressing business. In Europe, where several countries have decreed Close For the unvaccinated, the exchanges closed their doors. The Stoxx 600 Index, which aggregates shares of 600 companies from all major sectors in 17 European countries, fell 0.45%.

In the US, investors have been watching the succession of the Federal Reserve’s presidency with caution. Any signal coming from the US central bank could indicate a change in the pace of economic stimulus withdrawal or give an idea of ​​when interest rates in the country will rise again.

The Dow closed down 0.17% to 35,871 points. The Standard & Poor’s Index rose 0.34% to 4,704 points, and the Nasdaq Technology Exchange advanced 0.45% to 15,993 points.

Oil prices have partially recovered from deflation with the possibility of the US and China releasing reserves to increase supply in the market and lower prices. A barrel of Brent crude, whose price is a reference to Petrobras, rose 1.13% to $81.19, and the price of West Texas Intermediate crude rose 0.8% to $78.99.

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