Oil plunges abroad with risk of China slowdown

Oil prices in the international market recorded a sharp drop this Wednesday (7), with data from the Chinese economy renewing investors’ fears about the risk of a slowdown and possible global economic recession in the coming months.

Brent barrel prices fluctuated down 4.5% around 2:35 pm, at US$ 88.62 (R$ 462.79), renewing the lows since the end of January, before the invasion of Ukraine by Russia. .

Data on the Asian giant’s trade balance came in significantly below forecasts, with the negative impact of rising inflation on demand abroad, at the same time that the country returned to live with new restrictions due to Covid-19 and waves of heat that stopped production.

Figures released on Thursday showed that China’s oil imports fell 9.4% in August from a year earlier, as the extension of mobility restrictions due to the pandemic reduced demand for fuel.

In consolidated terms, Chinese imports grew by just 0.3% in August, from 2.3% in the previous month, and well below the forecast increase of 1.1%. Both imports and exports grew at the slowest pace in four months.

Exports rose 7.1% in August from a year earlier, slowing from an 18% rise in July, official data showed on Wednesday. Analysts had expected growth of 12.8%.

Investors see September 7 demonstrations within expectations

Contrary to oil prices on the day, Petrobras’ ADRs (American Depositary Receipts), which fell by more than 2% at the beginning of the session, reversed their trend and started to operate on a slight high – they registered an appreciation of 0.15% in the early afternoon.

ADRs are receipts for shares traded on the American stock exchanges linked to the shares of companies listed on the B3, which are subject to the mood of investors in relation to assets on a public holiday in Brazil.

The EWZ market index, which tracks Brazilian stocks and is quoted abroad based on the MSCI Brasil theoretical portfolio, registered a rise of 0.6%.

The perception of market agents heard by the Sheet so far is that the statements by President Jair Bolsonaro (PL) and the demonstrations did not bring a new fact with sufficient weight to have a more negative impact on asset prices in the Brazilian market.

“It seems to me that it was ok, without any outbursts on either side, without anything too serious. I think the novelty is that there was no problem, since many people had the expectation that there would be a problem this September 7th, and it turned out not happening, at least until now”, says Luiz Fernando Figueiredo, CEO of Mauá Capital.

“From a market point of view, every time bad things don’t happen, it ends up being good, so I think it’s a reason for the market to be a little calmer at tomorrow’s opening [quinta, 8]”, adds the former director of the BC (Central Bank).

“From what I’m following, there was nothing different. More of the same. The market has already discussed some type of institutional rupture as a risk. But the perception is that this probability has decreased”, endorses Rafael Ihara, partner and chief economist from Meraki Capital.

Leandro Saliba, a partner at the mining company AF Invest, interprets the statements in a more positive light. He says that the size of the demonstrations should be well received by the market, from the perspective of a more liberal economic conduct in a scenario of reelection.

“In Belo Horizonte, the parade and Praça da Liberdade were completely packed with families in green and yellow. I believe that the repercussion will be positive for the market”, says Saliba.

Chief economist at brokerage Necton, André Perfeito, also does not see in the manifestations observed so far anything that could significantly alter investor sentiment in relation to market performance.

“I don’t think we’ll have any big noise, either up or down, unless we have something very exotic, in the sense that Bolsonaro suggests some kind of democratic rupture,” says Perfeito,

“If the president stretches the rope too much, we may have a new political event, but I don’t think that will happen”, says the economist.

He adds that local market movements should continue to be more influenced by macroeconomic factors in the global economy.

The rise of Brazilian stocks abroad comes in the wake of the appreciation of the main American stock exchanges this Wednesday – the S&P 500 advanced 1.1%, the Dow Jones had gains of 1.2%, and the Nasdaq was up 1.5%.

The prospect of a slowdown in the global economy contributes to a scenario of less need for interest rate hikes, with a horizon that becomes more favorable for the shares of companies traded on the stock exchanges, says the economist at Necton.

with Reuters