Dollar has little change compared to real with abroad and Spending PEC on the radar

The dollar fluctuated between stability and a slight drop against the real in the first deals this Tuesday (20), with investors eyeing the depreciation of the US currency abroad, while, in Brazil, the focus was on the processing of the Gastança PEC .

At 9:11 am (Brasília time), the spot dollar retreated 0.07%, to R$ 5.3067 in the sale.

On B3, at 9:11 am (Brasília time), the first contract dollar futures contract rose 0.07%, to R$ 5.3180.

Allies of president-elect Luiz Inácio Lula da Silva (PT) try this Tuesday to approve the PEC even with difficulties for a consensus text and in the midst of uneasiness with parliamentarians generated by decisions of the STF (Federal Supreme Court).

The mayor, Arth ur Lira (PP-AL), scheduled the beginning of the voting session for 9 am. Petistas want the proposal to be analyzed soon, but try to seek an understanding of the terms of the PEC before it actually goes to the vote.

In the last session, the dollar fluctuated upwards against the real throughout the entire session and ended the business at a slight increase of 0.15%, at R$ 5.3020 on sale, on a day of greater risk aversion abroad .

The Brazilian Stock Exchange, on the other hand, had an adjustment session after the accumulated drop last week and operated in the positive field on Monday (19), in the wake of the decision by the Minister of the STF, Gilmar Mendes, to grant an injunction that withdraws the Bolsa Spending cap rule family.

The stock index appreciated by 1.83%, at 104,739 points, with the biggest rises of companies more focused on the domestic economy, which in recent weeks have suffered in a scenario of rising interest rates projected by the market that impacts future profit expected for companies on the stock exchange.

Among the biggest gains of the day, shares in Via advanced by around 16.2%, in Americanas up 12.6%, and in Magazine Luiza, 10.1%.

Minister Gilmar Mendes decided this Sunday (18) that the maintenance of the Brazil Aid next year could occur by opening extraordinary credit and that these expenses are not included in the limits of the spending ceiling. In the government of the president-elect, Luiz Inácio Lula da Silva (PT), the benefit will once again be called Bolsa Família.

“In practice, Mendes only allows Bolsa Família not to be subject to the ceiling in case of non-compliance with the rules of the fiscal framework”, said Étore Sanchez, chief economist at Ativa Investimentos.

“The fiscal impact tends to be smaller than that of the Transition PEC when it is restricted to Bolsa Família of R$ 600/month, but it is still necessary to better understand the details of the measure and how this affects the processing of the project in the Chamber”, they point out. XP analysts.

“In a first reading, the elected government came out strengthened in the clash of negotiations with Congress, which increased risk appetite and the curve of future interest rates yielded. Nothing better for companies in the retail sector, since they showed a high discount”, said João Frota Salles, an analyst at Senso Investimentos in a note.

Sanchez, from Ativa, assesses that, economically, the STF minister’s decision is better than the Gastança PEC, considering that the impact would be restricted to the R$ 150 billion of Bolsa Família for just one year.

According to the economist at Ativa, the measure increases expectations about the approval of the PEC this Tuesday.

The future Minister of Finance, Fernando Haddad (PT), said this Monday that the negotiation of the elected government Luiz Inácio Lula da Silva (PT) with the National Congress for the approval of the PEC continues, despite the decision of the Minister of the STF.

“The negotiation remains, it is important for the country to bet on good politics, on negotiation, on institutionality for us to give strength to the economic policy that will be announced and that will appease spirits and show that Brazil will be on the right path to from the 1st of January,” he said.

Also on Monday, the STF declared the rapporteur’s amendments unconstitutional. The score was 6 votes to 5 for the overthrow of the mechanism.

The announcement of new members of the economic team of the finance minister of the elected government is also on the radar of financial agents this week.

The future Minister of Finance announced this Monday (19) that the Deputy Attorney General of the National Treasury, Anelize Lenzi Ruas de Almeida, will be in charge of the PGFN (Attorney General of the National Treasury) of the elected government of Luiz Inácio Lula da Silva ( PT).

Last Tuesday (13), Haddad had already announced two names of his secretariat. Former banker Gabriel Galípolo will be the portfolio’s executive secretary, the second most important position in the ministry, and economist Bernard Appy will occupy a special secretariat for tax reform, an area in which he is a specialist.

Still among the highlights of the session, Boa Vista shares soared around 47% this Monday, after the financial and credit services company received a proposal from the North American Equifax for a business combination.

On the US stock exchanges, the main stock indices fell again, continuing the downward trend of the previous week.

The S&P 500 shed 0.90% and the Nasdaq lost 1.5%, while the Dow Jones fell 0.5%.

Last week, global markets accumulated losses in the wake of signals transmitted by global monetary authorities indicating a scenario ahead with new interest rate hikes to combat persistent inflationary pressure.

“Central bank week brought a bitter signal to parts of the market that monetary policies should rather remain contractionary, despite recent signs of cooling inflation and economic activity,” said Jason Vieira, chief economist at Infinity Asset.

Although it has reduced the pace of interest rate hikes from 0.75 percentage points in recent meetings to 0.50 points at this Wednesday’s meeting, the US central bank (Federal Reserve) said it expects to raise the basic interest rate even further and that should keep it elevated for longer than previously anticipated, signaling that its efforts to contain high inflation are likely to mean further growth in unemployment and a possible recession.

In Europe, the feeling of risk aversion also predominates, after the ECB (European Central Bank) raised interest rates for the fourth consecutive time this Thursday, although in a smaller magnitude than in its last two meetings.

The central bank of the 19 euro zone countries has raised the interest rate it pays on bank deposits from 1.5% to 2%, moving further away from a decade of ultra-loose monetary policy.

Still, the decision marked a slowdown in the pace of tightening after increases of 75 percentage points in each of the two previous meetings of the ECB, which promised further increases and presented plans to drain money from the financial system as part of its fight against the inflation.

“The Governing Council considers that interest rates still have to rise significantly at a steady pace to reach levels restrictive enough to ensure a timely return of inflation to the 2% medium-term target,” the ECB said.

The European Monetary Authority also raised its inflation forecasts for the euro zone and said price growth would remain above its 2% target over a projection horizon that now extends to 2025.

The bank now sees inflation in the bloc at 6.3% next year, compared with expectations of 5.5% made in September. Its forecast for 2024 has been raised from 2.3% to 3.4% while, in its first estimate for 2025, the ECB sees inflation at 2.3%.

At the same time, economic growth will suffer greatly in the coming year as a result of the war in Ukraine, particularly its impact on rising energy prices.

The ECB now sees GDP growth at 0.5% next year, compared to the 0.9% forecast in September, while in 2024, growth is forecast to be unchanged at 1.9%. In 2025, the ECB predicts growth of 1.8%.

With Reuters