06/17/2024 – 9:52
After a brief drop at the opening of this Monday, the 17th, the dollar in the spot market began to rise. Investors price appreciation in US Treasury bond yields, rise in market inflation projections for this and next year in Focus and operate under fiscal caution.
At 9:36 am this Monday, the spot dollar rose 0.41%, to R$5.4039. The future dollar for July gained 0.48%, at R$5.4085. Ibovespa is already falling. See quotes.
+ Market raises projection for inflation and dollar, and no longer foresees cuts in the Selic this year
Last week the dollar rose 1.06%, closing Friday at R$5.3812.
The market awaits this Monday some announcement of spending review measures by the government and, on Wednesday, 19th, the decision of the Monetary Policy Committee (Copom) for the Selic rate, with majority bets on maintaining the current level of 10.50% per year and with a unanimous score.
The focus is on President Luiz Inácio Lula da Silva’s meeting with the ministers who make up the Budget Execution Board, and the expectation is that a cut in expenses will be on the meeting’s agenda in search of fiscal balance this year and next. The presentation by the Senate this week of compensation measures for the extension of the payroll tax exemption for companies and municipalities is also expected.
USA and China
Also weighing against the real is the 1.63% drop in iron ore and data on industrial production and retail sales in China that fall short of analysts’ forecasts. Furthermore, the Chinese Central Bank (PBoC) maintained the interest rate on its medium-term loan line at 2.5%, signaling that China’s reference interest rates should not change this Wednesday.
Just at the opening, the dollar in cash exhibited a downward bias, with achievement after rising 1.08% last week and given the external accommodation of the DXY dollar index against other major currencies and the slight rise in oil.
Outside, investors await comments from Fed officials, in addition to interest rate decisions this week from the Bank of England and the Chinese Central Bank. Today, there are events scheduled with New York Fed President John Williams (1 p.m.); Philadelphia Fed President Patrick Harker (2 p.m.) and Director Lisa Cook (10 p.m.). Minneapolis Federal Reserve President Neel Kashkari said on Sunday (16) that the financial market’s prediction that the policy authority will cut interest rates once in 2024 is “reasonable”, and should occur “probably towards the end of the year.” end of the year”.
Selic
In the Focus bulletin, projections for the IPCA for 2024 rose from 3.90% to 3.96%; and for 2025, from 3.78% to 3.80%, while for 2026 and 2027 they remained at, respectively, 3.60% and 3.50%. The estimate for Selic at the end of 2024 went from 10.25% to 10.50% per year; and for the end of 2025, from 9.25% to 9.50% per year, being maintained at 9.00% for the end of 2026 and 2027. The GDP growth forecast for 2024 slowed down from 2.09% to 2. 08%, and for GDP growth in 2025 it remains at 2.00%. The exchange rate for 2024 goes from R$5.05 to R$5.13; and for 2025, from R$5.09 to R$5.10.
Earlier, the Getúlio Vargas Foundation reported that the General Price Index – 10 (IGP-10) rose 0.83% in June, after rising 1.08% in May. The result exceeded the median estimate of financial market analysts, calculated at 0.77%, and was within the range, between 0.60% and 0.88%, of the Projeções Broadcast survey. As a result, the IGP-10 accumulates an increase of 1.18% this year. The accumulated rate in 12 months was positive at 1.79%.
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