By Peter Nurse and Jessica Bahia Melo
Investing.com – US stock futures pointed to a lower open on Wall Street this Tuesday, 2, as investors scaled back bets on interest rate cuts in the first half of the year in the US, following strong economic data .
In the corporate scenario, Rubrik intends to launch an IPO, while UBS announces a new share buyback program.
In Brazil, the exchange rate against the real is at its highest level in almost six months.
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1. Expectations of a Fed interest rate cut decrease; U.S. futures markets fall
American futures markets fell this Tuesday, following the negative trend of the previous day. This was due to concerns that expected interest rate cuts by the Federal Reserve could be delayed until the second half of the year.
At 7:55 am (Brasília time), the contract was 0.37% lower, falling 0.25%, while losing 0.32%.
The major indices closed largely lower on Monday, with the broad-based index falling 240 points, or 0.6%, and the broad-based index falling 0.2%. The high-tech , bucked the trend, rising 0.1%.
The fall was influenced after data indicated a strengthening of the American manufacturing sector, raising doubts about the possibility of a cut in interest rates by the Fed as early as June.
There’s more economic data to digest on Tuesday, including and , both from February, ahead of Friday’s widely anticipated March report.
The release of solid US data on Monday caused investors to lower expectations for the Federal Reserve’s first interest rate cut this year.
CME’s FedWatch tool now considers a 61.3% chance of a Fed interest rate cut in June, down from about 70.1% probability a week ago.
This benefited the greenback, with the , which measures the currency against its main rivals, trading just below the more than four-month high of 105.07 seen on Monday.
This strength is best illustrated in relation to the Japanese yen, with the pair trading just below the 152 level that prompted the last intervention from Japanese authorities in 2022.
This yen weakness came despite the Bank of Japan’s first interest rate hike since 2007 last month, prompting Finance Minister Shunichi Suzuki to reiterate on Tuesday that he would not rule out any options to respond to moves currency disorder.
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2. Rubrik announces IPO plans
The IPO market is rebounding after Rubrik announced plans on Monday to list its shares, adding to a growing wave of companies turning to the capital markets after a two-year hiatus.
The cybersecurity platform is expected to follow the recent debuts of the Reddit (NYSE:) and Astera Labs (NASDAQ:).
After a record year of IPOs in 2021, rising inflation and interest rates resulted in a reduction in technology investments in the public and private markets.
The company’s revenue for the fiscal year ending in January rose about 5% to $627.9 million, but its net loss widened to $354.2 million from $277.7 million the year before. Rubrik plans to trade on the New York Stock Exchange under the symbol “RBRK.”
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3. UBS buyback demonstrates confidence
UBS (SIX:) is emerging from the turmoil surrounding its merger with rival Credit Suisse which faces problems, in a relatively strong position, even as doubts still persist about the accuracy of the latter’s financial reports.
UBS said last week in its annual report that there is a risk that “a material error” may not be detected by UBS and could result in a material misstatement of the financial results reported by Credit Suisse (SIX:).
However, the Swiss banking giant showed confidence in the future by announcing on Tuesday a new share buyback program worth up to $2 billion, with the scheme starting on Wednesday.
The scheme follows the 2022 buyback, when UBS repurchased 298.5 million of its shares – equivalent to 8.6% of its shares – for US$5.2 billion.
Before the deal was announced, UBS had already repurchased around 1.2 billion ($1.32 billion) worth of its shares.
CHECK OUT: Price quotes for the main commodities
4. Oil on the rise with strong manufacturing activity data
Oil prices rose on Tuesday morning, driven by signs of improving demand in China and the US, the world’s biggest oil-consuming nations.
At 7:57 a.m., futures traded 1.82% higher at $85.23 per barrel, while the contract rose 1.66% to $88.87 per barrel.
Data released earlier this week showed that March oil in China expanded for the first time in six months and in the US for the first time in more than a year, which should translate into an increase in oil demand from these two giants. economic.
At the same time, fears of further supply disruptions to the oil-rich Middle East have risen following a fatal Israeli attack on Iran’s embassy in Syria, marking an escalation in the war in Gaza between Israel and Iran-backed Hamas. .
The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will hold an online meeting of its Joint Ministerial Monitoring Committee on Wednesday to analyze the market.
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5. Dollar rises against the real at the highest level since October
With the understanding that the American economy remains robust after the release of economic data, raising doubts about the beginning of the cycle of interest cuts in the USA, the dollar appreciated against the currencies of several countries, including the real. The American currency reached R$5.059, touching R$5.0704 at the day’s high. This is the highest level for the American currency in almost six months.
With the appreciation, the Central Bank announced on the night that it will carry out the first intervention in the exchange rate since the third term of President Luiz Inácio Lula da Silva (PT) began. The monetary authority must hold an additional auction of up to 20 thousand exchange rate swap contracts, with values of US$ 1 billion, aiming to protect the currency against excessive fluctuations in the American currency in relation to the Brazilian currency.
At 7:57 am (Brasília time), the ETF (NYSE:) rose 0.50% in the pre-market.
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