Ibovespa (IBOV): Three factors that should decide the direction of the markets

O Ibovespa (IBOV) starts the week without rest for the investors. You markets international markets point to a Monday (6th) with sideways movements, after the yield (yield) of the United States 10-year bond (T-note) closed below the 4% level last Friday (3rd).

However, the coming days reserve many catalysts to increase the volatility of the risk assets. The highlight is the biannual testimony of the president of the Federal Reserve, Jerome Powell, in the Senate and House, tomorrow and the day after. In addition, economic indicators on the job in the US reach the screens.

More details about schedule of the week are here. Combined, these releases should calibrate bets on the terminal rate level by Fed. For now, the hope is that it will not exceed 5.5%, but the discussion about a rate close to 6% is not discarded.

the chinese factor

However, it is the “modest” goal of the China growth around 5% of the Gross Domestic Product (GDP) in this year that put pressure on global markets today. The number was below the expectation of a bolder target, between 5.5% and 6%, after growing “only” 3% last year.

In reaction, the commodities metallic and actions of mining companies fall steadily. O iron ore closed down 2% on the Chinese futures market in Dalian, while the London Stock Exchange is affected by the fall of BHP and Rio Tinto. In the pre-market New Yorkstock receipts (ADRs) from the OK fall by around 1.5%.

Ibovespa hostage to a local factor

Therefore, there are two external factors – one coming from China and the other from the USA – that should influence the Ibovespa today. But brazilian scholarship there is also a short-term local factor that tends to shorten the life of business – even in the dollar it is us future interest.

The market awaits news about the new rule Supervisor. The expectation is that the framework will be known before the next meeting of the Monetary Policy Committee (Copom) at the end of this month.

Speculations speak of using GDP per capita (per inhabitant) as a reference for government spending, replacing the spending ceiling. It remains to be seen what this actually means. Any resemblance to the endogenous hexagonal band of yore is not mere coincidence.

In any case, the initiative aims to provide arguments for the Copom to cut the basic interest rate. But until then, the arm wrestling between the president Lulahis economic team and the political wing of the PTon the one hand, and the central bankon the other hand, must have new rounds.

Please note that the fall of GDP Brazilian in the final stretch of 2022 served as ammunition for a new attack on the BC. The current level of Selic It is Roberto Campos Neto were targeted again. As if all that wasn’t enough, the season of results is loaded this week, with the disclosure concentrated between Wednesday and Thursday.

Therefore, the next few days promise to be eventful in the financial market, with the first full week of March maintaining the same hectic pace that marked the first days of the new month. After all, days of calm have been something rare in recent months, both here and abroad.

Check out the performance of global markets around 7:45 am:

USA: Dow Jones futures fell 0.10%; the S&P 500 fluctuated with -0.07% and the Nasdaq had a slight decrease of 0.02%;

NY: the Ibovespa in dollar (EWZ) rose 0.99% in the pre-market; among the ADRs, that of Vale fell 1.52% and those of Petrobras fell 0.81%

Europe: the pan-European Stoxx 600 index was up slightly by 0.03%; the Frankfurt stock exchange gained 0.23%, Paris rose 0.38%, but London fell 0.41%;

Asia: the Japanese Nikkei 255 index closed up 1.11%, while the Hang Seng rose 0.17%, but the Shanghai Stock Exchange fell 0.19%;

Exchange: the DXY index was up 0.07%, 104.60 points; the euro was down 0.04% at $1.0631; the pound fell 0.27% to US$1.2010; the dollar was up 0.15% against the yen, at 136.06 yen;

Treasuries: yield on the ten-year T-note was at 3.927%, up from 3.960% in the previous session; the 2-year T-bill yield was at 4.842%, from 4.871% in the same comparison;

Commodities: gold futures were up 0.15% to settle at $1,857.20 an ounce on the Comex; WTI crude futures were down 1.41% to settle at $78.56 a barrel; Brent oil retreated 1.42%, to US$ 84.65 a barrel; the iron ore futures contract (May) closed down 2.07% in Dalian (China), at 897.50 yuan a metric ton, after adjustments.