Mini Super Quarta brings Powell and Campos Neto, jobs in the USA and industry in Brazil

With investors anxious about when the Federal Reserve will reduce interest rates in the US, Jerome Powell’s speeches make today’s trading session a ‘mini Super Wednesday’, even more so because there is also a speech by Campos Neto on the agenda.

If the concerns abroad are about high interest rates, here it is about how far the cycle of cuts by the Copom will go. In the midst of this, the rise in the dollar led the Central Bank to intervene in the foreign exchange market. With the addition of oil appreciation, local interest rates also rise.

That said, future indices in NY are operating lower this Wednesday (03), continuing the negative start of the quarter, while investors await new employment data (ADP survey) from the largest economy in the world, which will be released before the March payroll, on Friday.

In addition to Powell, other members of the American central bank, including Fed governors Michelle Bowman and Adriana Kugler. Chicago Fed President Austan Goolsbee and Fed Vice Chairman for Supervision Michael Barr will also speak at events.

Here, industrial production for February comes out, with LSEG consensus projecting an increase of 0.3% on a monthly basis and 5.6% on an annual basis, in addition to the services PMI. Campos Neto will be at an event promoted by Bradesco BBI.

In Brasília, the decision by the president of the Senate, Rodrigo Pacheco (PSD-MG), to maintain the social security exemption for small and medium-sized city halls, taken on Monday (1st), caused uproar in the government, which claimed not to have been informed of the Pacheco’s decision.

1.World Exchanges

U.S

North American stock markets suffered losses of up to 1% yesterday, in their worst trading session in several weeks, amid fears that the Federal Reserve (Fed, the US central bank) will be cautious and will only start cutting interest rates later , perhaps in the second semester.

See how futures markets perform:

Dow Jones Future: -0.03%

S&P 500 Future: -0.14%

Nasdaq Futures: -0.24%

Asia

Asian markets closed lower this Wednesday, following the behavior of Wall Street, which yesterday had its worst daily performance in weeks amid concerns about the trajectory of basic interest rates in the US. With the lack of appetite for risk, the S&P Global/Caixin survey that showed the Chinese services PMI rising to 52.7 in March, as predicted, took a backseat.

It is worth remembering that Chinese markets will be closed on Thursday and Friday due to a holiday.

Shanghai SE (China), -0.18%

Nikkei (Japan): -0.97%

Hang Seng Index (Hong Kong): -1.22%

Kospi (South Korea): -1.68%

ASX 200 (Australia): -1.34%

Europe

European markets are mostly operating higher, with investors reflecting inflation data from the region. Inflation in the 20-nation eurozone eased to 2.4% in March, according to preliminary figures published on Wednesday. Economists consulted by Reuters expected the rate to remain stable compared to the previous month, at 2.6%.

FTSE 100 (UK): -0.39%

DAX (Germany): +0.34%

CAC 40 (France): +0.33%

FTSE MIB (Italy): +0.15%

STOXX 600: +0.09%

Commodities

Oil prices are trading higher, extending the previous day’s gains, as a larger-than-expected drop in US crude oil inventories and escalating geopolitical tensions raised investor concerns about tighter supply.

Iron ore prices in China closed lower but are still trading at a weekly high as traders balance weak demand and hopes of better future consumption. China’s real estate crisis has reduced demand for steel products, which are heavily used in construction. Benchmark iron ore for May (SZZFK4) on the Singapore Exchange fell 1.9% to US$99.65 per ton.

WTI oil, +0.22%, at $85.34 a barrel

Brent crude, +0.29%, at $89.18 a barrel

Iron ore traded on the Dalian exchange fell 2.54% to 749 yuan, equivalent to US$103.51

Bitcoin

• Bitcoin, +0.72% at US$66,553.05 (compared to the price 24 hours ago)

2. Agenda

This Wednesday’s agenda is marked by data from industry and services in Brazil, as well as new data from the American labor market.

Brazil

9am: Industrial production February; LSEG consensus predicts an increase of 0.3% on a monthly basis and 5.6% on an annual basis

10am: Services PMI

10am: Campos Neto gives a talk at the 10th edition of the Bradesco BBI Brazil Investment Forum, promoted by Bradesco BBI, in São Paulo.

USA

9:15 am: Private employment (ADP) for March; LSEG consensus predicts 148 thousand requests

10:45 am: Services PMI

11am: Services ISM

11:30 am: Weekly oil stocks – EIA

1:10 p.m.: Speech by Fed Chairman Jerome Powell

3. Economic news

Discussion of fiscal targets for 2024 and 2025 is on the table

The Minister of Planning and Budget, Simone Tebet, said this Tuesday that the government will reassess the zero primary deficit target established for this year month by month, and added that, with the collection figures, it will become clearer whether the target of surplus of 0.5% of GDP for 2025 can be maintained.

Haddad says choosing the new BC president will be smooth

The Minister of Finance, Fernando Haddad (PT), stated this Tuesday that the process of choosing the future president of the Central Bank will be peaceful and the result of dialogue, highlighting that he has spoken about the topic with the current president of the authority, Roberto Campos Grandchild.

4. Political news

Exemption from municipalities’ payroll creates noise between the Senate and the government

The president of the Senate, Rodrigo Pacheco (PSD-MG), argued that the decision to invalidate the section of Provisional Measure (MP) 1202/2023, which overturned social security exemptions for small and medium-sized municipalities, aimed to avoid “legal uncertainty manifest.” The MP, published at the end of last year by the federal government, reestablished the rate of contributions to the National Institute of National Insurance (INSS) from 8% to 20% by municipalities with up to 156 thousand inhabitants.

Pacheco (PSD-MG) also said that “there is no need for a reaction” from the Ministry of Finance regarding its decision to overturn the reimbursement of municipalities’ payroll and “no justification for this”. The Senate president’s decision, taken on Monday (1st), caused uproar in the government, which claimed it had not been informed of Pacheco’s decision.

5. Corporate Radar

BRF (BRFS3)

BRF (BRFS3) announced the termination of the share buyback program, considering that the maximum number of common shares acquired had been reached. The slaughterhouse acquired on the stock exchange, at market prices, a total of 14 million common shares issued by it, which will be kept in treasury and subsequently used to execute the Restricted Share Grant Plan or Stock Option Grant Plan. Purchase.

(With Estadão, Reuters and Agência Brasil)