The dollar fell against the real shortly after opening this Tuesday (6), after having jumped more than 1% the day before, as investors entered a waiting period before the vote on the PEC of the Transition in the Senate committee and the decision monetary policy of the Central Bank.
Around 9:05 am (BrasÃlia time), the spot dollar retreated 0.38%, to R$ 5.2623 in the sale.
On B3, the dollar futures of the first month fell 0.35%, to R$ 5.2915.
In the trading session on Monday, the day was one of greater risk aversion, with the market opting for a cautious posture before defining the fiscal policy of the Lula government from 2023.
In a scenario of escaping risk and seeking protection both in the country and on a global scale, the dollar advanced 1.32% against the real, to R$ 5.2820 for sale, the highest increase since November 25, when it rose 1.86%, after a meeting between former mayor Fernando Haddad, the main candidate for the Ministry of Finance, and bankers at a Febraban (Brazilian Federation of Banks) event.
The Brazilian Stock Exchange, on the other hand, recorded a sharp drop above 2%, with the Ibovespa closing the day down 2.3%, trading at 109,349 points, the biggest drop since November 25, when the stock index fell 2, 55%
The fear of financial agents about the conduct of fiscal policy from 2023 by the Lula government and the impacts on the trajectory of the public debt also meant that future interest rates, which embody market expectations about the direction for the Selic rate, have back to record high.
The futures interest contract maturing in 2024 advanced from 13.82% at the close of Friday (2) to 14% this Monday. The title for 2027 went from 12.49% to 12.75%.
On Sunday night (4), the President of the Senate, Rodrigo Pacheco (PSD-MG), released the voting agenda for the week with the prediction of analysis of the Transition PEC for this Wednesday (7).
The protocol text authorizes the elected government to exclude expenses with the AuxÃlio Brasil program —which will once again be called Bolsa FamÃlia—from the spending ceiling. According to the proposal filed in the Senate, the Transition PEC will have an impact of R$ 198 billion.
The general rapporteur of the 2023 Budget, senator Marcelo Castro (MDB-PI), said this Monday that the rapporteur of the PEC (proposed amendment to the Constitution) of the Transition will be senator Alexandre Silveira (PSD-MG), and that the proposal must last for two years.
“It’s a key week for Brazilian economic policy. On the fiscal front, the Senate will likely vote on the Constitutional Amendment that allows spending above the ceiling next year. Market participants will also closely follow President-elect Lula’s signals about names for the economic team”, point out the XP Investimentos analysts in a report.
According to Nord Research analysts, with the market’s perception of a more expansionary fiscal policy that could compromise the dynamics of public accounts, investors began to demand more premiums to finance the government, with an impact on future interest rate hikes.
Chief Economist at Mirae Asset Wealth Management, Julio Hegedus Neto predicts that the vote in the Senate on Wednesday should come with lower fiscal impact numbers compared to those initially presented, closer to R$ 150 billion and with a two-year term.
The economist adds that, in the formation of the economic team, attention will be focused mainly on the appointment of the Minister of Finance, with the name of former mayor Fernando Haddad as the strongest bet on the market at the moment.
XP analysts also say that the BC (Central Bank) Copom (Monetary Policy Committee) meeting will also be on the market’s radar on Wednesday.
“The base rate is widely expected to remain at 13.75%. But the committee may reinforce in the post-meeting communiqué the importance of a balanced fiscal policy to help keep inflation expectations well anchored”, say XP analysts.
In the Focus Report published this Monday by BC, analysts’ estimates for the IPCA (National Index of Consumer Prices) increased, for the third week in a row, from 5.02% to 5.08%.
The Selic rate should end next year at 11.75%, against 11.50% in the previous survey.
Stocks rise in Asia with easing of restrictions on the zero covid policy in China
In the global market, US Stock Exchanges operate in the negative field, with data indicating an economy that remains heated which increase fears about a more aggressive monetary tightening by the American central bank (Federal Reserve).
The S&P 500 closed down 1.79% on Monday, while the Dow Jones lost 1.40% and the Nasdaq, 1.93%.
Figures released on Monday indicated that activity in the US services sector unexpectedly accelerated in November, with a recovery in employment.
The Institute for Supply Management (ISM) said on Monday its non-manufacturing PMI rose to 56.5 last month from 54.4 in October, which was the lowest reading since May 2020.
Economists polled by Reuters had forecast the indicator falling to 53.1. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of US economic activity.
The survey followed last Friday’s data showing stronger-than-expected job and wage growth in November. The recent data represent a counterpoint to the Fed’s objective of reducing the pace of adjustments at next week’s meeting, points out the chief economist at Mirae Asset.
According to him, the opinion still prevails in the market that the new Fed increase should slow down to 0.5 percentage points, compared to the last four hikes of 0.75 points, but with the rate remaining at the level of 5.0% for a “sufficiently adequate” time. After the last rise in early November, interest rates in the United States are at a level between 3.75% and 4% per annum.
Hegedus Neto also recalls that, as of today, the ceiling of US$ 60 will apply for oil sold by Russia, which should result in the threat of supply to countries that endorse this measure.
In Europe, the Euro Stoxx 50 stock index fell 0.54%, with falls of 0.67% for the CAC-40, in Paris, and 0.56% for the DAX, in Franfurkt.
On the Asian stock exchanges, the day was bullish for shares, with some market relief in the wake of the reopening of the Chinese economy, with the country’s government relaxing measures to restrict the zero covid policy after protests from the population.
The Hang Seng, Hong Kong’s stock index, rose 4.5%, while China’s CSI 300 rose 1.96%.
With Reuters
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