Dollar closes higher after strong US employment data; Ibovespa is falling | Economy

Dollar closes higher after strong US employment data; Ibovespa is falling | Economy
Dollar closes higher after strong US employment data; Ibovespa is falling | Economy
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1 of 1 Dollar operates on the rise — Photo: Karolina Grabowska
Dollar operates on the rise — Photo: Karolina Grabowska

The market reversed the signal and started to worsen this Friday (2), after the release of employment data in the United States. The dollar closed higher, while Ibovespa, the main stock index on the Brazilian stock exchange, B3, fell.

The payroll report showed that the US created 353,000 jobs in January, above analysts’ expectations, which estimated 180,000 new jobs.

In Brazil, industrial production figures released in the morning were also higher than expected, with an increase of 1.1% in December compared to the previous month.

In addition to the announcements, investors continue to reflect on last Wednesday’s decisions (31) on interest rates in Brazil and the USA.

See below for a summary of the markets.

As a result, he accumulated:

  • increase of 1.18% in the week;
  • gain of 0.63% in the month;
  • and an increase of 2.39% in the year.

Yesterday, the North American currency fell 0.45%, quoted at R$4.9151.

The Ibovespa fell 1.01%, to 127,182 points.

As a result, he accumulated:

  • drop of 1.38% in the week;
  • decline of 0.45% in the month;
  • and a drop of 5.22% in the year.

Vale and Petrobras, companies with the greatest weight in the index, fell 2.03% and 1.30%, respectively. In the case of the oil company, the negative result comes after the company reached, on Thursday, its highest nominal market value in history, reaching R$552 billion.

Yesterday, the Ibovespa closed up 0.57%, at 128,481 points.

Understand what makes the dollar rise or fall

What’s moving the markets?

The main expectation this Friday (2) was the United States jobs report, the payroll, for January.

The document showed that the country created 353,000 jobs in the first month of the year — above the projections of economists consulted by Reuters, who estimated 180,000 new jobs. The unemployment rate was 3.7%, compared to a forecast of 3.8%.

The market monitors the strength of the US labor market to align expectations about the direction of US interest rates. This is an important reference for the Federal Reserve (Fed, the North American central bank) in decisions about monetary policy.

In practice, a heated market generates more job openings, more hiring and salary increases — which tends to inject more money into the economy and, thus, put pressure on inflation.

The Fed president said that the institution is not working with the scenario of cutting interest rates in March, reaffirming that this is unlikely. Still high interest rates worry the market because they make credit-taking processes more expensive for people and companies, which can reduce consumption and increase default rates.

“The heated job market, persistent underlying inflation and recent communication from the Fed president (…) corroborate our view that the interest rate cut cycle in the United States should begin in the third quarter of this year”, analyzes the economist Claudia Rodrigues, from C6 Bank.

“However, we recognize that there are chances of a cut in the second quarter if core inflation, measured by PCE, surprises in the next releases and comes in below expectations”, he continues.

Still abroad, the market remains attentive to news about the North American banking system and the indicator agenda.

On Wednesday, New York Community Bank (NYCB), which bought part of Signature Bank in a $2.7 billion deal last year as the institution marked the third-largest bankruptcy in U.S. history, reported a below market estimates.

The scenario, according to experts, once again raised concerns about the country’s regional banks. NYCB shares fell more than 11% on Thursday.

In Brazil, on Wednesday, the Copom reduced the Selic rate by 0.5 percentage points, to 11.25% per year, the lowest level in two years, within what was expected. The Committee also signaled that it is working with a scenario of reductions of the same magnitude in its next meetings.

Still on the domestic agenda, the Brazilian Institute of Geography and Statistics (IBGE) reported this Friday that Brazilian industrial production rose 1.1% in December compared to the previous month. The result was above expectations. In relation to December 2022, production rose 1.0%.

Meanwhile, in the year, the increase was 0.2%, after a drop of 0.7% in 2022. As a result, industrial production is 0.7% above the pre-pandemic level (comparing the current result with February 2020), according to Fiesp (Federation of Industries of the State of São Paulo).

The article is in Portuguese

Tags: Dollar closes higher strong employment data Ibovespa falling Economy

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