May 19, 2022

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Ibovespa futures drop as investors position themselves cautiously on 'Super Wednesday'

Ibovespa futures drop as investors position themselves cautiously on ‘Super Wednesday’

Ibovespa futures fell in early trading on Wednesday (4), a day marked by important monetary decisions in both Brazil and the United States. The contract due in June, at 9:25 am, is rebounding 0.35% to 107,420 points, off US futures.

In the US, the Dow Jones, S&P 500 and Nasdaq contracts for June rose 0.40%, 0.46% and 0.39%, respectively. There, the FOMC is expected to announce a 50 basis point rate hike, as well as initiate a plan to cut its balance sheet by about $9 trillion at a rate of $95 billion per month, starting in June.

These two mentioned points have already been announced. Investors are positioning themselves cautiously, for now, awaiting what Federal Reserve Chair Jerome Powell will indicate for upcoming meetings at the press conference to be held after the decision. The market is waiting to see if the tone of the speeches will be more extremistwith further monetary tightening, or more doveswith more moderate procedures.

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The decision about monetary policy in the world’s largest economy also ends up affecting other markets. In Europe, investors are also avoiding taking big trades, with indicators varying slightly – although the trend is mostly down.

Germany’s DAX is down 0.04%. The FTSE in London is down 0.42%. France’s CAC 40 is down 0.35%. The Eurozone STOXX 600 Index is down 0.45%.

There, the tendency of the indicators to fall was reinforced by the proposal of the European Union to introduce a phased embargo on Russian oil. The ban still has to be voted on in the lower house by the bloc’s members, where it must meet some resistance, but only the signal is enough to raise fear of a recession on the continent, which relies heavily on fuel from the Vladimir-ruled country. put it in the .

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The European Union has proposed a gradual ban on imports of all Russian oil as member states try to agree a sixth package of sanctions against Moscow for its invasion of Ukraine. European Commission President Ursula von der Leyen said the ban would cover all Russian oil. It has promised to phase out supplies in an “orderly” manner, reaching crude oil within six months and refined products by the end of the year, XP Investimentos explains, in Morning call.

The price of a barrel of Brent oil for July reacts to the news and is advancing by 4.28% to $109.40. Meanwhile, West Texas Intermediate crude for June rose 4.3% to $106.84.

In Asia, stock markets in Japan and China were closed for holidays. Hong Kong’s HSI, where the stock market opened, is down 1.10%, with Tencent and Alibaba down 3.05% and 3.74%, respectively. South Korea’s Kospi was down 0.11%.

With business halting in China, iron ore fell 0.54% in Singapore.

Brazil has a Coboom decision

In addition to the US interest rate decision, Brazil also set its central bank this Wednesday a new interest rate.

“The market consensus is a 1 point increase (going to 12.75%) but, as in the US, expectations remain in terms of decision disclosure and next steps,” says XP Investimentos. With inflation still rising here – as in the rest of the world – investors are wondering whether the cycle of rallies will end now or in the future.

The yield curve runs higher. DI contracts for January 2023 rose 0.01 percentage point to 13.12%. The DI for January 2025 is also up 0.04 points to 12.23%. On the long end, DI returns for 2027 and 2029, respectively, were up 0.02 ppi and 0.01 ppi, to 12.07% and 12.17%.

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The dollar forward advanced 0.34% to 5.018 Brazilian real. The trade dollar rose 0.37% to R$4.981 in purchases and R$4.982 in sales. The Brazilian currency is going in the opposite direction to DXY – the index, which measures the strength of the US currency against other world currencies, decreased by 0.09%.

Technical Analysis by Pamela Simizato, Investment Analyst and Daily Specialist at Clear Corretora

Ibovespa

“The session the previous day was quieter. After the index tested the 106K support level, it showed no buying or selling strength. Today, with the full economic calendar, we can expect more volatility.”

dollar

“The dollar has returned to work below the resistance level at 5.120 Brazilian Real, which indicates the possibility of a consolidation in this area.”

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