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Market raises forecast for inflation and interest rates
The market has readjusted its expectations for inflation, interest rates and economic growth from the mega-increase by Petrobras announced last week.
What explains: the expectation of an advance in prices also generates a perspective of a more contractionary monetary policy by the Central Bank. With the rise in interest rates, the market readjusts its calculations for GDP growth.
In numbers:
- Inflation: the median of market projections for this year’s IPCA was for 6.45%, compared to last week’s calculation of 5.65%. For 2023, it went from 3.51% to 3.70%. The inflation target for 2022 is 3.5% and for 2023 it is 3.25%.
- Fees: Selic is expected to end this year in 12.75% and the next one in 8.75%. In the previous survey, the projection was 12.25% and 8.25%, respectively.
- GDP: economists raised their 2022 growth forecast from 0.42% to 0.49%but reduced for 2023, from 1.50% to 1.43%.
Itaú also readjusted upwards its forecast for the performance of the economy this year, motivated by the surge in commodities and positive data at the beginning of the year. The bank sees that GDP should grow 0.2% in this year. For 2023, the high estimate dropped from 1% to 0.5%.
More on Petrobras mega-raise:
Crypto giant buys Brazilian exchange
Binance, the largest cryptocurrency exchange in the world, announced this Monday the signing of a memorandum of understanding for an eventual acquisition of Brazilian sim;paul.
The negotiation, which still needs to be approved by the BC, had no values disclosed. The brokerage classified the Brazilian market as “rapidly developing” and said it believes it has much to contribute to the development of the blockchain ecosystem.
Who is who:
- Binance: Created in China, the exchange left the country in 2017 following the government’s crackdown on cryptos. Today based in Malta, it is investigated by several countries for not having a real physical address.
- yes; paul: founded in Porto Alegre in 2019, the brokerage claims to have operating authorizations given by the BC and the Securities and Exchange Commission.
why it matters: The sheet showed last month that Binance’s country arm, B.Fintech, was registered with the IRS with a fake phone and email, according to a tax filing.
- The brokerage also received an order from the CVM not to trade securities in the country.
- Binance stated that it has collaborated with the authorities in responding to requests for information and clarifications, in addition to reaffirming its commitment to Brazilian Justice.
The purchase of sim;paul by Binance comes a few weeks after the Senate approved a project that requires exchanges operating in the country to have authorization from a federal government agency. The text needs to go through the Chamber.
Risk aversion dominates the stock market
Risk aversion in Brazil and the US marked the local market’s Monday. Interest and exchange rates closed higher, while the Ibovespa fell 1.60%, at 109,927 points. The dollar rose 1.30%, the BRL 5.12.
What explains:
- Commodity drop: the expectation of diplomatic advances in the war in Ukraine generated optimism in the European market and helped to cool prices. The Valley, which fell 5.36%was also pressured by the high number of coronavirus cases in China.
- Interest decisions: the next Wednesday should be marked by high interest rates in the US and Brazil, which generates flight from the stock exchanges and values US bonds, considered the least risky assets in the world.
- Tax risk: the market is keeping an eye on the measures studied by the government to alleviate the soaring fuel price. There is a fear that they will jeopardize public accounts, both in terms of expenditures and in terms of waiver of expenses.
Nubank plummets: fintech shares ended this Monday with a drop of more than 9% on the New York Stock Exchange (NYSE), at US$ 5.93 (R$ 30). Since the peak reached on December 11 (US$ 11.85, R$60), the day after its debut on the Stock Exchange, its shares have lost almost half their value.
Because dropped down? Technology companies have been penalized by the expectation of rising interest rates in the US, but the digital bank suffered a new blow after a regulatory decision announced by the BC on Friday (11).
- In practice, the measure gradually increases the capital requirement for large fintechs that function as payment institutions. The decision brings them closer to the regulation that exists for banks.
- Nubank said that the new rules will make it have an additional capital requirement in 2023 and 2024 lower than the original expectation, but that this obligation will be higher in 2025, when the rules come into full effect.
Among the other fintechs Brazilian companies listed in the US, Stone’s shares fell 6.4% this Monday, and those of PagSeguro PagBank, 5.6%. The company belongs to Grupo UOL –which has a minority and indirect stake in Grupo Folha, which publishes the Sheet.
Search for VPNs soars in Russia
The demand of users living in Russia for VPNs (Virtual Private Networks) has skyrocketed 2,088% on the eve of the Instagram ban in the country compared to the average recorded before the invasion of Ukraine.
The data is from the monitoring company Top10VPN.
Understand: this tool encrypts data and hides where a user is located. Russians have been looking for this alternative to be able to access websites and apps that were either blocked by the local government or stopped operating in the country by decision of the companies themselves.
- Access to Instagram and other networks owned by Meta, which owns Facebook, was cut by Moscow on Monday.
- Russian users are also unable to access the Netflix catalog, which has suspended its activities in the country. The Chinese app TikTok, a fever among young people, prohibits the creation of new content by Russian users.
- See here a list of companies that “canceled” Russia and left the country after the invasion of Ukraine.
More on sanctions on Russia:
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