On polling day Transition PEC at Constitution and Justice Commission (CCJ) of SenateO Ibovespa (IBOV) it walked sideways for most of the time, but accelerated in the last minutes of the trading session.
This Tuesday (6), after falling by more than 2% yesterday, the reference index of the Brazilian Stock Exchange advanced 0.72%, to 110,188.57 points.
In Brasilia, the rapporteur for the Transition PEC, senator Alexandre Silveira (PSD-MG)presented an opinion to the CCJ proposing to expand the spending ceiling by BRL 175 billion in 2023 and 2024, instead of excluding social spending from the fiscal rule.
In addition to the R$ 175 billion, the text raised the opening of approximately R$ 23 billion in next year’s accounts when excluding investments from the ceiling limit based on a portion of excess government revenue.
The meeting just ended, the Senate commission approved the Transition PEC with the proposal to increase the spending ceiling limit by R$ 145 billion for a period of two years. The surplus R$ 23 billion was maintained.
It was also established that the elected government should send Congress a new fiscal rule to replace the spending cap by mid-2023. Silveira’s text stipulated until the end of next year.
Approved at the CCJ, the PEC will undergo analysis in the Senate plenary.
The prospect of higher spending in the coming years, according to Safra strategists, remains a challenge to the fiscal balance and could be a risk for the start of the cut in Selic in 2023.
On this Wednesday, the central bank will announce the decision on the fate of interest rates in Brazil. The focus should be on the signs of the Copom for the next movements, since the consensus bet is for stability in the interest rate at 13.75%.
The shares of Petrobras 🇧🇷PETR3🇧🇷PETR4) ended the day down. The recoil was less than that of PRIO 🇧🇷PRIO3), which lost 3.83%, and 3R Petroleum 🇧🇷RRRP3), of 3.55%. The sector accompanied the collapse of oil prices on international markets.
OK 🇧🇷VOUCH3) advanced amid expectations of economic reopening in China. The stock rose 1.45% and supported the Ibovespa.
According to Marcus Labarthe, founding partner of GT Capital, the market is closely following the easing of the Covid Zero policy in the Asian country, hoping that the reopening will help to further boost the appetite for the action. Still, Labarthe doesn’t see much easing in the short term, as coronavirus cases in the region remain high.
“Even so, the expected implementation of easing measures throughout 2023 should raise confidence levels and prospects for demand for commodities”, he adds.
With information from Reuters.
Source: Moneytimes
I am an author and journalist with a focus on market news. I have worked for a global news website for the past two years, writing articles on a range of topics relating to the stock market. My work has been published in international publications and I have delivered talks at both academic institutions and business conferences around the world.
