Brazil’s Ibovespa futures opened higher on Wednesday, boosted by rising global expectations of interest rate reduction in the United States and a complete local economic agenda.
At 9:06 a.m. Brasília time, the December contract was up 0.16% at 157,550 points, continuing a cautious upward trend driven by improved risk sentiment in global markets.
According to local media outlet InfoMoney, investors in Brazil are weighing the international shift toward looser monetary policy against local data releases, which may alter expectations for the country’s own economic trajectory.
The coming hours are expected to provide several signals to the Brazilian market, keeping volatility in control while traders analyse inflation numbers and government fiscal communication.
Focus on domestic inflation and tax measures
The Brazilian agenda, meanwhile, is focused on President Luiz Inácio Lula da Silva, who is to sign a measure to expand the income tax exemption limit.
Accompanying the announcement, Ministry of Finance secretaries will hold a press conference further weighing a macroeconomic day already defined by important announcements.
On the other hand, the Brazilian Institute of Geography and Statistics published data for the National Consumer Price Index-15 (IPCA-15), which climbed by 0.20 per cent from the previous month.
The most recent result was slightly higher than the median forecast of 0.18 per cent in a Reuters poll, following a 0.18 per cent increase the previous month.
The moderation is still broadly consistent with what markets expected , but, as small as the upside surprise is, it keeps inflation in investors’ minds.
Also on Wednesday, the Central Bank is scheduled to publish October monetary and credit data; the Treasury will also publish central government data for October.
And at the end of the day, Caixa Econômica Federal is also expected to disclose its Q3 earnings, providing another drop on top of a corporate macro-heavy day.
Global markets lifted by US rate cut expectations
International sentiment is mostly driven by increasing optimism about US monetary policy.
Data released on Tuesday showed that US retail sales rose less than expected, and consumer confidence fell—factors that boosted expectations for a Federal Reserve rate drop in December.
According to the CME Group’s FedWatch tool, interest rate futures now imply an 80.7% probability of a 25-basis-point drop at the Fed’s December 10 meeting, up from 50% a week ago.
The change is driving gains in global markets, with Wall Street futures trading higher in premarket hours. Dow Jones futures increased 0.11%, S&P 500 futures 0.24%, and Nasdaq futures 0.38%.
The trend toward risk assets has also influenced currency markets.
The spot dollar was quoted 0.09% higher against the Brazilian real at R$5.382, even as the first-maturity dollar contract on the B3 market lost 0.06% to R$5.380.
Asia and Europe track US momentum
Across the Asia-Pacific, most markets closed higher as traders responded to the growing prospect of US monetary easing.
The upbeat tone spread to Europe, where markets traded in the green on similar expectations for the Federal Reserve’s upcoming announcement.
In the United Kingdom, the focus is on the Autumn Budget, with Finance Minister Rachel Reeves ready to spell out the government’s spending and taxing plans for the coming year.
The announcement is expected to add another factor to the European market sentiment.
Commodities steady as geopolitical hopes rise
Oil prices remained near steady levels after hitting a one-month low. Rising hopes for a peace deal between Ukraine and Russia have raised the potential of lifting limits on Russian petroleum, even as a worldwide surplus looms.
Iron ore prices in China closed marginally higher, aided by a modest increase in domestic demand.
The increase helped balance challenges from rising global supply and falling steel production, providing a minor lift to one of Brazil’s most important export-linked sectors.
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