Friday, April 16, 2021

Ibovespa rises with an international scenario and investors waiting for PEC; dollar recedes – Prime Time Zone

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Wikimedia CommonsUS currency loses value against the real with optimism on the international stage

THE financial market maintains the pace of recovery this Monday, 1st, driven by international optimism and with investors waiting for the vote of the PEC Emergencial in the Senate. At around 1:10 pm, the dollar fall 0.62%, quoted at R $ 5.570. The American currency reached a maximum of R $ 5.608, while the minimum did not exceed R $ 5.556. The dollar closed last week with an increase of 1.65%, to R $ 5.605. The currency appreciated by 2.39% in February, while since the beginning of the year it has already grown 8.03% against the real. Following the good mood in the international markets, the Ibovespa, the main index of the Brazilian Stock Exchange, registered an increase of 1.61%, to 111,787 points. The session closed last week with a drop of 1.98%, to 110,035 points.

Markets in Europe and the United States are operating at the beginning of the month after the approval of the $ 1.9 trillion package to stimulate the US economy this weekend. The mood of investors is 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.

In the domestic news, investors follow the negotiations for the resumption of emergency aid and the vote on the Emergency PEC, which makes room in the budget for the new benefit rounds. President Jair Bolsonaro (without party) met with the presidents of the Chamber, Arthur Lira (PP-AL), and of the Senate, Rodrigo Pacheco (DEM-MG), this Sunday, 31, to settle the PEC vote by the senators between tomorrow and Wednesday, 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 split and that the benefit will be released before the Legislative overturns similar measures to the PEC of War approved in 2020 that take the expenditure out of the spending ceiling limit. 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.

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