PCE inflation in the US, IPCA-15, interest rate decision in Japan and more highlights

After a scare with higher-than-expected quarterly inflation, the March consumption deflator (PCE) – the Federal Reserve’s (Fed) favorite inflation indicator, focuses the attention of global markets this Friday (26). A stronger than expected indicator tends to keep economists pessimistic about the possibility of the US Central Bank cutting interest rates in the short term.

In Asia, the Bank of Japan (BoJ) maintained its interest rate. The BoJ also said it will continue to carry out bond purchases in line with the March decision.

Here, inflation measured by IPCA-15 is also highlighted. The LSEG consensus predicts a monthly increase of 0.3% and 2.6% on an annual basis. The president of the Central Bank, Roberto Campos Neto, gives a lecture at the Scenario and Perspectives for Brazil event, promoted by the Young Presidents’ Organization (YPO), in São Paulo.

1.World Exchanges

U.S

US futures indexes operate higher after results from big techs and before March inflation data. Alphabet shares jumped 11% in after-hours trading after better-than-expected first-quarter earnings. The company also authorized its first dividend, as well as a $70 billion buyback.

Microsoft saw shares rise 4% after the software maker reported fiscal third-quarter results that surpassed Wall Street expectations.

See how futures markets perform:

Dow Jones Futures: +0.15%

S&P 500 Future: +0.69%

Nasdaq Futures: +0.96%

Asia

Asian markets closed mostly higher after the Bank of Japan kept its key interest rate at 0%-0.1%, as expected.

Tokyo’s headline inflation rate for April was 1.8%, slowing from 2.6% in March. Underlying inflation in the capital – which excludes fresh food prices – fell sharply to 1.6% from 2.4% in March, missing the 2.2% expectations of economists consulted by Reuters. Tokyo’s inflation data is widely considered a leading indicator of national trends.

Shanghai SE (China), +1.17%

Nikkei (Japan): +0.81%

Hang Seng Index (Hong Kong): +2.12%

Kospi (South Korea): +1.05%

ASX 200 (Australia): -1.39%

Europe

European markets operate with gains, regaining momentum after a drop in yesterday’s session. Technology and construction stocks led the gains, rising 1.6% and 1.48%, respectively, while chemicals and insurance stocks were the only ones to fall, both down less than 1%.

FTSE 100 (UK): +0.48%

DAX (Germany): +0.73%

CAC 40 (France): +0.22%

FTSE MIB (Italy): +0.87%

STOXX 600: +0.61%

Commodities

Oil prices are trading higher as players weigh comments from the US Treasury Secretary that the country’s economy is likely in a stronger position than indicated by weak first-quarter data, along with concerns about oil supply. as conflict continues in the Middle East.

Iron ore prices in China closed in the black and reached their third weekly high due to the improvement in Chinese demand.

WTI oil, +0.42%, at $83.82 a barrel

Brent crude, +0.33%, at $89.30 a barrel

Iron ore traded on the Dalian exchange rose 0.06% to 884.50 yuan, equivalent to US$122.05

Bitcoin

• Bitcoin, -0.36% at US$64,395.46 (compared to the price 24 hours ago)

2. Agenda

The week ends with the release of inflation data in Brazil and the United States.

Brazil

8am: April Industry Confidence

9am: IPCA-15 April, LSEG consensus predicts monthly increase of 0.29% and 3.86% on an annual basis

9am: Roberto Campos Neto gives a talk at the Scenario and Perspectives for Brazil event, promoted by the Young Presidents’ Organization (YPO), in São Paulo

10:40 am: Lula and Haddad participate in the inauguration ceremony of Biomm’s insulin production plant

2pm: Lula and Haddad participate in the inauguration of the accommodation building for students at the Technological Institute of Aeronautics (ITA)

4:45 pm: Lula and Haddad participate in the Embraer aircraft delivery ceremony to Azul

USA

9:30 am: March PCE Index; LSEG consensus estimates increase of 0.3% on a monthly basis and 2.6% on an annual basis

11am: April consumer confidence

3. Economic news

Haddad states that tax reform is more important than one might imagine at first glance

The Minister of Finance, Fernando Haddad, said that the tax reform approved by Congress and whose complementary bill was sent to the Legislature yesterday is more important than one might imagine at first glance. “It is something that can enhance national life and call into question issues that the current environment would not allow,” said the minister.

4. Political news

Zanin responds to the government’s request and suspends the payroll tax exemption extension

Minister Cristiano Zanin, of the Federal Supreme Court (STF), suspended, in a preliminary decision this Thursday (25), the payroll tax exemption for 17 sectors of the economy and for municipalities until 2027. As it is preliminary, the decision will for the virtual plenary of the STF. Zanin spoke out in the Direct Action of Unconstitutionality (ADI) filed this Wednesday (24) by the federal government.

After Zanin’s decision, Pacheco says the government ‘errors by judicializing politics’

The president of the Senate, Rodrigo Pacheco (PSD-MG), stated, in a note, that the government “errors by judicializing the policy and imposing its own reasons, in an apparent third round of discussion” about the payroll tax exemption.

5. Corporate Radar

Cielo (CIEL3)

Cielo (CIEL3) reported recurring net profit of R$503.1 million in the first quarter of 2024 (1Q24), an amount 14% higher than that reported in the same period in 2023.

Petrobras (PETR4)

Petrobras will distribute to shareholders a total of R$21.95 billion, corresponding to 50% of the value assessed for extraordinary dividends. The decision relates to the 2023 fiscal year. With monetary updates since December 31st of last year, the payment is currently calculated at R$1.7571521 per preferred and ordinary share. However, the remuneration will be made in two equal installments in the months of May and June and, until the dates of the actual transfers, the amounts will continue to be corrected.

(With Estadão, Reuters and Agência Brasil)