Brazil’s Ibovespa and Dollar Surge: Economic Optimism Grows

Brazil’s Ibovespa closed up for the second day, gaining 0.33% to hit 128,106 points.

The week ended up at 0.85%, despite March dropping by 0.71% and the first quarter being down by 4.53%.

The US dollar also climbed, reaching R$5.01, a 0.74% increase. Futures interest rates ended the day higher.

Investors stayed cautious before the US released its PCE index, a key inflation measure. Ahead of this, Brazil saw a slight uptick in unemployment, matching seasonal forecasts.

ASA Investments’ Leonardo Costa highlighted strong job market signs early in 2024, with continued employment growth and falling unemployment rates.

Brazil’s Central Bank predicts 2024’s economy will grow more than expected, adjusting GDP growth from 1.7% to 1.9%.

It expects inflation to settle at 3.5% this year and 3.2% next year. Central Bank President Roberto Campos Neto sees these trends as evidence of effective monetary policy.

The US economy outperformed expectations, growing 3.4% in Q4 2023, beating the 3.2% forecast. This news had a mild effect on the market, with indices showing little change.

In Brazil, heavyweight stocks like Vale, Petrobras, and Ambev made gains despite market challenges.

Vale rose by 0.38%, Petrobras by 2.22%, helped by higher oil prices, but Eletrobras dropped by 0.41% on auction day.

Marfrig soared by 12.80% after strong quarter results, and BRF, its associate, went up by 3.42%. Casas Bahia and Ambev also enjoyed increases, signaling investor confidence.

As the quarter closes, the focus turns to the US PCE data. This period marks a time of reflection for investors, looking forward to a fruitful April and beyond.

These updates show the market’s dynamics, reflecting broader economic movements and investor sentiment as we step into the next quarter.

Spot Dollar Rises Above R$5, Marking Global Gains

On Thursday, the spot dollar soared, breaching the R$5 mark, a testament to its broad ascent across global financial arenas.

This trading session, significantly shaped by investor maneuvers around the Ptax rate setting for the month and quarter’s end, saw the US currency climb to R$5.0156, a 0.70% uplift.

Throughout March, this upward trajectory was maintained, culminating in an 0.88% increase, complemented by a 0.34% rise just this week.

Further spotlighting the currency’s robust performance, the May future dollar contract on the B3 surged by 0.55%, settling at R$5.0300, reflecting a keen market anticipation for the upcoming Ptax adjustments.