High markets in Europe and the United States boost Ibovespa, despite apprehension with new rounds of benefit without austerity counterparts
The Brazilian financial market maintained the pace of recovery on Monday, 1st, amid optimism in the international scenario and concern with the negotiations for the return of emergency aid without the PEC Emergency having been approved by the Congress. THE dollar closed with a slight fall of 0.08%, to R $ 5,600. The American currency reached a maximum of R $ 5.608, while the minimum did not exceed R $ 5.556. The currency closed last week with an increase of 1.65%, to R $ 5.605. The strong depreciation of the exchange rate due to the increase in fiscal risk caused the dollar to accumulate 2.39% in February, and 7.94% since the beginning of the year. Pulled by the good humor in the markets abroad, the Ibovespa, the main index of the Brazilian Stock Exchange, closed the first trading session in March with an increase of 0.27%, to 110,334 points. The index ended last week with a drop of 1.98%, with a total of 110,035 points.
Markets in Europe and the United States were up earlier this month after the $ 1.9 trillion US stimulus package was approved this weekend. The mood of investors was also driven by the pace of vaccination against Covid-19 in several areas of the United States and the fall in interest rates on sovereign bonds. “After a real soap opera that started during the term of Donald Trump, the $ 1.9 trillion package was approved in the House of Representatives, and now goes to the Senate, which reduces some of the uncertainty about the market horizon. And it’s not just the stock market that is positively impacted: US government bonds (treasuries), after “slowing down” their yields to 1.6%, dropped to 1.4%, ”says Lucas Collazo, an analyst at Rico Investimentos.
In the domestic news, investors followed the negotiations for the resumption of the emergency aid and the vote on the PEC Emergencial, which makes room in the budget for the new benefit rounds. The president Jair Bolsonaro (without a party) met with the presidents of the Chamber, Arthur Lira (PP-AL), and of the Senate, Rodrigo Pacheco (DEM-MG), this Sunday, 28, to settle the PEC vote by the senators between tomorrow and Wednesday fair, 3. Economy Minister Paulo Guedes and other aides to the president also participated in the negotiations. The text that creates calamity clauses for cutting spending should have been voted on by the Senate last Thursday, 25, but the decision was postponed due to the lack of consensus among Congress leaders. Investors fear that the text will be divided and that the benefit will be released before the Legislative overturns measures similar to the PEC of War approved in 2020 and that exclude expenses with the benefit of the spending ceiling. Congressional leaders opposed the approval of counterparts for the release of the benefit and classified the federal government’s imposition as “blackmail.”
The financial market has revised upward expectations for the inflation and dollar in 2021, according to figures published in the Focus Bulletin in this Monday. Economists and entities consulted by the Central Bank estimate that the Broad Consumer Price Index (IPCA) end the year with an advance of 3.87%. This is the eighth bullish revision followed. A week ago, the expectation was 3.82%, while a month ago it reached 3.53%. The new value is above the center of the 3.75% target pursued by the national monetary authority, with a margin to fluctuate between 2.25% and 5.25%. At the same time, analysts consulted by the national monetary authority see the dollar to R $ 5.10 by the end of this year. This was the second week in a row of revised expectations. A week ago, the forecast was R $ 5.05, while a month ago the projection indicated the dollar at R $ 5.01.