Ibovespa is unstable, but defends 132 thousand points before the release of the Fed minutes

Ibovespa is unstable this Wednesday, 3rd. After falling 0.23% at its lowest point, at 132,389.71 points, it started to rise. The appreciation came after Petrobras shares went into the positive field, following oil. In New York, stock futures indexes remained low, while the spot dollar reduced its rise and future interest rates in Brazil rose with a little more momentum, following the yields on United States Treasury bonds.

Despite the advance of Treasuries, especially the ten-year one, Alexandre Mathias, chief strategist at Monte Bravo, considers that the movement is not a concern, after the strong declines in the last two months of 2023. Now, he says, it is achieving a little, but without overturn the idea that the Federal Reserve (Fed, the central bank of the United States) will start cutting the base interest rate this year.

“Inflation is well behaved and allowed the Fed to stop raising interest rates, putting the expectation of a fall on the agenda. We believe that the reduction will begin in June, and not in March as some estimate.”, says Mathias.

Therefore, the market awaits the release of US data and the Fed's minutes to adjust its bets on when the US interest rate cut will begin.

Investors are worried and a little more pessimistic about when and how quickly interest rates will be cut in the United States, economist Álvaro Bandeira mentions in a morning commentary. However, there is a less unfavorable side to the USA, which is that it will not go through a recession that was taken for granted, he mentions.

After giving in earlier, oil rose, with Brent oil, which is a reference for Petrobras, advancing almost 1.00%. There are reports that protesters in the southwestern Libyan city of Ubari have closed the Sharara oil field, one of the largest and most important in the country. As a result, there is a fear of a reduction in supply.

Despite the parliamentary recess in Brazil, political issues attract attention at the beginning of the year, amid the disputes between the Legislative and Executive Powers. The instability in relations has already been evident since the publication, last week, of the MP suspending the effects of payroll tax relief. And it gained an extra ingredient after President Luiz Inácio Lula da Silva blocked Congress's action to dictate the release of amendments.

Despite the noise, Mathias, from Monte Bravo, emphasizes that the important thing is maintaining the fiscal framework and the zero deficit target for 2024. “If the framework and target are preserved, the benign scenario for Brazil tends to continue. ”

In this cautious environment, the Bovespa Index closed Tuesday, 2nd, down 1.11%, at 132,696.63 points, with investors waiting for this Wednesday's agenda and concerns about the instability in the relationship between the government and Congress.

“It should not lose the level of 131 thousand points, under penalty of accelerating achievements”, warns economist Álvaro Bandeira.

Despite the 2.83% appreciation of iron ore in Dalian, China, Vale's shares fell 0.51% at the time mentioned above. The Ibovespa gave up 0.12%, at 132,5432.15 points, compared to a maximum of 132,871.68 points, up 0.13%.

Petrobras advanced 0.48% (PN) and 0.56% (ON), while shares of large banks also began to rise, with the biggest increase of 0.54% (Bradesco PN).

The internal agenda is empty, highlighting only data from the external sector. Current transactions had a negative result of US$1.553 billion in November, worse than the median estimates found in the Projeções Broadcast survey, of a deficit of US$500 million. Even so, this is the best performance for the months of November since 2016. The entry of Direct Investments in the Country (IDP) surprised in November and totaled US$ 7.780 billion.