Dollar rises and closes at R$5.11, with the Fed on the radar; Ibovespa has a slight increase of 0.04%

O dollar closed up 0.23%, quoted at R$ 5.110, this Wednesday (24), alternating between losses and gains in a volatile session.

The real benefited from the inflow of foreign investments, but reversed the movement with risk aversion among investors, who are awaiting new data and speeches from Jerome Powell, commander of the North American central bank, which may change the bets regarding the cycle of high interest rates in United States .

“He (Fed official) would have to be very hawkish, very tough for the market to get any worse. The market has already put a lot on the price in recent days,” said Marcos Weigt, head of treasury at Travelex Bank.

The price reaction came a day after the US currency fell broadly, on the back of weaker indicators in the US that revived hopes that the Federal Reserve will be less harsh in the next monetary policy signals.

already the Ibovespa had a slight increase of 0.04%, at 112,897.84 points, in this trading session, after hovering around stability throughout the day. The index was mainly supported by the advance of Petrobras, in a high session of oil abroad, while new deflation data in Brazil benefited consumer stocks.

Also on the market’s radar was the Broad Consumer Price Index – 15 (IPCA-15 ) of August, which biggest deflation in the historical series confirming bets that the Brazilian interest rate cycle may have come to an end – a more beneficial scenario for domestic assets.

The focus of investors this week is also the release of new data on US inflation that could give clues about the next steps in the cycle of high interest rates in the country, as well as a speech by the president of the Federal Reserve Jerome Powell.

Fed officials have already indicated that the next rate hikes will be made depending on the data released between each meeting, thereby reinforcing the weight of indicators in market behavior and bets.

On Tuesday (23), the dollar dropped 1.26% to R$5.098. The Ibovespa advanced 2.13%, to 112,857.10 points.

Petroleum

Crude oil futures closed higher on Wednesday. There was some volatility on the day, with the week’s US inventories data, the movement of the dollar and also the news about negotiations between powers and Iran over Tehran’s nuclear program in the focus of investors.

October WTI crude closed up 1.23% ($1.15) at $94.89 a barrel on the New York Mercantile Exchange (Nymex), and Brent for the same month advanced 1.00 % (US$1.00), at US$101.22 a barrel, on the Intercontinental Exchange (ICE).

Contracts started the day with gains, supported by the decline in inventories pointed out by the American Petroleum Institute (API) at the end of Tuesday. The appreciation of the dollar, however, kept these gains contained, since in this case oil, quoted in US currency, becomes more expensive for holders of other currencies.

In the late morning, the Department of Energy (DoE, its acronym in English) reported that US oil inventories were down 3.282 million barrels, compared to analysts’ forecast of a decline of 500 thousand. After the data, oil lost more breath and even retreated.

overall feeling

Investors’ global risk aversion, triggered by fears about a possible generalized economic slowdown due to a series of interest rate hikes around the world to contain record levels of inflation, has varied in intensity depending on expectations about the interest rate hike cycle in the United States. United.

The process of raising the US rate continued in July with a new increase of 0.75 percentage point. However, the Federal Reserve has signaled that it could make smaller hikes as the country’s economy already shows signs of slowing, seeking to avoid a recession.

Higher interest rates in the United States attract investments for the country’s fixed income due to its high security and favor the dollar, but harm markets and stock exchanges around the world, including the North American ones.

Investors are also monitoring the situation of China’s economy, which is also showing signs of a slowdown linked to a series of lockdowns in relevant cities. The expectation is that the Chinese government will intensify an effort to stimulate the economy, while facing difficulties to reverse a situation of low consumption by the population, which impacts the country’s demand for commodities.

In the domestic scenario, the Benefits PEC which creates or expands social benefits with an estimated cost of R$ 41 billion, was poorly received by the market, as it reinforces the fiscal risk by bringing new spending above the ceiling.

Even so, the Ibovespa and the real found room for recovery with an improvement in the mood of the market, although they could still be harmed if there is a resumption of pessimism.

Up and down from B3

Here are the highlights of Wednesday’s trading session:

biggest highs

• CVC (CVCB3) +11.28%;
• Magazine Luiza (MGLU3) +8.43%;
• Natura Group (NTCO3) +8.33%;
• Positive (POSI3) +8.09%;
• Minerva (BEEF3) +5.65%

biggest casualties

• IRB Brazil (IRBR3) -5.19%;
• Usimines (USIM5) -3.60%;
• Suzano (SUZB3) -3.23%;
• Valley (VALE3) -3.22%;
• Locaweb (LWSA3) -2.80%

*With information from Reuters and Agência Estado