Ibovespa Futuro falls with attention divided between tax reform and Powell

Ibovespa Futuro operates with a slight drop this Wednesday (8), with attention divided between the vote on tax reform in the Brazilian Senate and statements by the president of the Federal Reserve (Fed), Jerome Powell.

After passing through the Constitution and Justice Commission (CCJ), the Senate plenary must vote on the Proposed Amendment to the Constitution (PEC) for tax reform this Wednesday. The proposal’s rapporteur, Eduardo Braga (MDB-AM), said on Tuesday (7) that the vote in the collegiate body was a “great sign of approval in the Senate plenary”.

Regarding the fiscal, sources told Reuters that the government will not send a message to Congress to modify the 2024 target and will maintain, at least for now, the quest for zero deficit to give Finance Minister Fernando Haddad time to negotiate the approval of measures that increase revenue and try to avoid a change.

Still on the radar, the market is following a speech by the president of the Central Bank (BC), Roberto Campos Neto, as well as results from the consolidated public sector and retail sales.

The volume of retail sales in Brazil grew 0.6% in September, after recording a drop of 0.1% in August. In comparison with September 2022, there was an increase of 3.3%, the fourth consecutive increase in the indicator. The LSEG consensus projected stability in sales for the month (0.0%) and estimated an increase of 2.5% in the annual comparison.

At 9:13 am (Brasília time), the future index due in December was operating with a devaluation of 0.17%, at 120,240 points.

On Wall Street, US index futures are mixed, with investors awaiting two days of comments from Fed Chairman Jerome Powell, starting today at 11:15am (Brasília time), to find out whether US interest rate hikes have truly ended.

Last week’s surprisingly weak jobs data raised expectations that interest rates had peaked, but comments from the Fed since then have warned against complacency in the fight against inflation.

Bets for interest rate cuts in May are at 50%, according to the Fed Funds rate curves.

This morning, the Dow Jones Futures rose 0.06%, S&P Futures rose 0.04% and Nasdaq Futures registered a drop of 0.02%.

Dolar today

The commercial dollar operated with an increase of 0.29%, quoted at R$4.888 when buying and R$4.889 when selling.

The dollar futures (DOLZ23) for December advanced 0.45%, reaching 4,904 points.

Meanwhile, DXY, an index that measures the strength of the dollar against a basket of currencies, rose 0.16%, to 105.71 points.

In the interest rate market, contracts operated at an increase, with the exception of the shorter maturity. DIF24 (January to 2024) operates with a drop of 0.01 pp, at 12.00%; DIF26, +0.06 pp, at 10.68%; DIF28, +0.06 pp, at 11.04%; DIF31 +0.05 pp, at 11.37%

Exterior

European markets operate mostly in the red, continuing the negative dynamics observed since the beginning of the week.

Corporate profits continue to drive individual share price movement in Europe. Commerzbank, Credit Agricole, Marks and Spencer, Telefonica, Adidas and ABN Amro reported their respective balance sheets this morning.

On the data front, retail sales in the euro zone for September fell 0.3% compared to August and 2.9% on an annual basis. The LSEG consensus pointed to a decline of 0.2% on a monthly basis and 3.1% on an annual basis.

Asia

Asian markets closed mostly lower, with South Korea’s benchmark index erasing more than half of the gains made earlier this week, while investors digested a positive survey on Japanese business sentiment.

South Korea’s Kospi is down 3.24% in two sessions since Monday, when it gained more than 5% after the country reimposed a ban on short selling.

The Reuters Tankan survey showed that Japanese business confidence improved for the first time since August and that the mood of the services sector improved for a second month, highlighting a challenging outlook amid an uneven economic recovery.

Commodities

Oil prices are trading lower, hitting their lowest level in more than three months, after industry data showed a sharp increase in US oil supply, while mixed economic data from China raised concerns about global demand. of oil.

Iron ore prices in China closed higher, as sentiment was boosted following a speech by the governor of China’s central bank on support for the real estate market, the country’s largest steel-consuming sector.

Pan Gongsheng, governor of China’s central bank, said the side effects of real estate market adjustments on the financial system are generally manageable and will guide financial institutions to keep open stable financing channels through real estate credit and bonds, reported the state media.

December’s reference iron ore on the Singapore Stock Exchange rose 1.09%, to US$ 124.4 a ton, the highest value since April 3.