Dollar opens higher after Bolsonarista blockades against Lula

The exchange market started on a high this Tuesday (1st), giving back part of the strong appreciation of the real on the eve and reflecting the tensions caused by illegal road blocks promoted by Bolsonarista protesters against the result of the elections.

Investors are also waiting for a statement from President Jair Bolsonaro (PL), who has been silent since the result of the vote that gave victory to Luiz Inácio Lula da Silva (PT), the first Brazilian elected three times to the Presidency of the Republic.

At 9:10 am, the spot commercial dollar advanced 0.56%, quoted at R$ 5.1930. In addition to domestic tensions, the exchange rate may reflect pressures from abroad throughout the day, where investors are preparing for another sharp increase in interest rates from the Fed (Federal Reserve, the central bank of the United States).

This Monday (31), the financial market showed volatility as investors adjusted their portfolios to what little they could see about the future of the Brazilian economy.

At the end of the trading day, the balance was positive for investments in shares. The Brazilian Stock Exchange closed up 1.31%, with the Ibovespa climbing to 116,037 points.

The spot commercial dollar dropped 2.60%, quoted at R$5.1640, after having jumped above R$5.40 at the beginning of the trading session.

“We think that some danger comes from these truck drivers’ roadblocks, but the market doesn’t seem to care too much about it,” said Rodrigo Natali, chief strategist at INV.

Despite the appreciation of most shares in this session, especially those belonging to companies potentially benefiting from public policies expected for a PT administration, there was a fall in the prices of assets of companies controlled by the government.

Petrobras’ preferred shares, which are the company’s most traded on the stock exchange, melted 8.47%. Banco do Brasil shares plummeted 4.64%.

DI interest (Interbank Deposits), as the rates of these contracts negotiated between banks and which serve as a reference for the entire credit sector, are also called in the short, medium and long term.

Financial market analysts pointed out that the performance in the coming days of the most important financial indicators to measure investors’ confidence in the economy —Ibovespa, dollar and interest rates— will depend on the president-elect’s indications on the conduct of the economy and, in addition, on the reaction of Bolsonaro and his supporters to defeat.

Investors repeated on Monday a movement of stock rotation already observed last week, giving preference to assets that can be more favored with the change of government.

Cogna and Yduqs, companies in the education sector, had their shares traded with appreciation of 3.46% and 5.42%, respectively. Expectations about these assets grow due to PT’s history of including the private sector in higher education expansion policies, such as ProUni (University for All Program).

In the opposite situation, Taurus shares ended the day down 4.67%. The arms manufacturer achieved wide appreciation during the administration of Bolsonaro, who is a defender of policies to arm the population, including making access to weapons more flexible.

During the Bolsonarista administration, the number of people with licenses increased by 473% and, from 2018 to the beginning of this month, Taurus shares appreciated by 670%.

The first session of the market after Lula’s victory also showed that the market expects favorable winds for several sectors potentially benefiting from the increase in family income, such as air transport, tourism and retail.

The airlines Gol and Azul shot up 8.83% and 8.91%. Travel operator CVC advanced 9.63%.

Alpargatas gained 9.04% in view of the perspective of policies aimed at improving income in the country.

Among the campaign promises repeated in the speech after confirmation of the result at the polls, Lula said that he will resume a policy of readjusting the minimum wage above inflation, one of the hallmarks of the period in which he ruled the country.