Good morning, foreign exchange market! Yesterday operated with very strong volatility. Mainly in the morning, the rate was manipulated by Ptax makers at the end of the month with a sharp rise! In the afternoon the gains were returned a little, but with the lack of fiscal commitment in Brazil it was not possible to improve much. The spot dollar closed the day at R$5.0405 for sale after reaching a maximum of R$5.0715 and a minimum of R$5.01.
And here we go for another Super Wednesday! With a decision, the current rate will probably be maintained, which will be announced during the trading session. The most important thing, as always, will be the press conference by Jerome Powell, Fed chair, on the next steps of North American monetary policy. Here, we are priced in a 0.5 pp cut in the Brazilian interest rate, at 12.25% per year. The decision will be made after 6pm (Brasília time).
However, yesterday, members of the government began to discuss the possible revision of the target of zero deficit in public accounts. Wow, lol. Brazil being Brazil. What is promised is not fulfilled and we are going to spend it, then we will see what we do with the goal! So there is no market to trust. Now we have to see the expansion of the collection approved in 2023 and then talk about a target, after all, the framework linked spending to collection. So there’s only one way, to raise more, because cutting spending in this government won’t happen.
In Europe, inflation is falling as a result of interest rate increases in ten consecutive sessions and will probably not require further increases. Now is the time to assess the situation before taking further action. The expectation is that the GDPs of the 20 Eurozone countries will shrink in the third quarter. And conflicts in the Middle East and Ukraine could bring recession to Europe.
In the economic calendar for today we will have in Brazil the September one, the , the Selic after the market closes. In the US, (ADP) and October. In addition, those of September and the interest rate decision with the press conference afterwards.
Good business everyone, lots of profit and a great holiday!