Global stocks rise after Russia announces troop withdrawal near Ukraine

Global stock markets began to operate higher after the easing of tensions generated in recent days over the imminence of a war in Europe. That expectation was partially dispelled after Russia announced the beginning of the withdrawal of some troops exercising near Ukraine’s borders.

At 12:20 pm on Tuesday (15), the main US stock indices abandoned the lows of recent days. Dow Jones, S&P 500 and Nasdaq were up 1.02%, 1.03% and 1.64%, respectively.

European stocks were also trading in the dark, with highlights for the 1.60% rise in the Euro Stoxx 50, an indicator that tracks 50 of the region’s main companies. The London, Paris and Frankfurt markets advanced 0.68%, 1.48% and 1.72%, in that order.

Oil also showed a strong fall in the international market. A barrel of Brent was down 4.03% at USD 92.59 (R$ 482.39). Russia is one of the biggest producers of the commodity and a conflict involving the country would reduce the supply, putting further pressure on prices that hover around the highest value since 2014.

In Brazil, the benchmark index of the Stock Exchange rose 0.32%, to 114,262 points. The Ibovespa has maintained moderate highs despite the risk aversion that the threat of war has provoked in the main markets. The dollar fell 0.59% to R$5.1880.

This advantage for the Brazilian stock exchange occurs because foreigners are looking for excessively undervalued stocks in the country while they wait for clearer signs on the unfolding of the crisis between Russia and Ukraine and, mainly, on the measures that the Fed (Federal Reserve, the American central bank) will adopt to combat the highest inflation in the United States in four decades. The question these investors expect answers to is: how far will the Fed raise its interest rate?

If US interest rates go from zero to a relatively high annual rate in a short interval, there is a risk that investors will stop investing resources in Brazil and other emerging markets to cash in on the rise in US Treasury bonds.

This morning, yields on US sovereign bonds touched the highest in more than two years on some maturities, according to Reuters.

That rise came amid bets that the Fed will raise the rate by 0.5 percentage point in March, a move considered aggressive by the country’s standards.

Even so, the real is keeping its fall. Analysts also attribute this drop to Brazil’s high interest rate, which is at 10.75%, with expectations of over 12%. Despite the risks that the country offers, international investors are considering that the return pays off.