During the period from September 22 to 26, the markets in Brazil and the US operated steadily, with their performance influenced by data releases and events like the encounter between Lula and Trump at the UN General Assembly.
The impact of data disclosure and statements from financial authorities is expected to be more significant during the week of 29 September to 3 October.
Last week was spent anticipating information and building rapport.
The final week of September started with high anticipation for the release of the IPCA-15 and the revision of the US GDP, both of which were only made public on Thursday, the 25th.
The U.S. revised its second quarter GDP growth rate to 3.8%, which is higher than the previous estimate of 3.3%.
Peter From Matta, CEO of Audax Capital, observes that the dollar has stayed strong compared to developing currencies due to the high interest rates and the perception of security it provides during global uncertainty. In the local market, there has been moderate volatility driven by updates on the Federal Reserve’s monetary policy.
In Brazil, the IPCA-15 was reported prior to the market opening. It showed a 0.48% increase in inflation from September, following a 0.14% decrease in August. This led to the stock market opening lower for the day, a trend that continued throughout the trading session.
Da Matta states that the data on a national level confirms the presence of controlled inflation, although there are still specific sectoral effects influencing investment choices in fixed and variable income.
The dollar experienced a small increase against the real due to external and internal factors, including global risk aversion and uncertainty about fiscal policy and structural reforms, as analyzed by Da Matta in the currency market.
Brazilian investors are looking for secure and lucrative investment opportunities amidst increased predictability and risk management.
The market is showing signs of a slow economic recovery, particularly in the consumer and credit sectors, which remain strong despite various global and domestic obstacles.
During the UN General Assembly, there was a notable interaction between Brazilian President Luiz Inacio Lula da Silva and US President Donald Trump, where Trump mentioned the positive rapport between them and hinted at a planned meeting the following week.
The following day, Lula repeated Trump’s remarks in his speech, emphasizing that the talks with the US concern scarce resources and Brazil does not want to solely export minerals.
The government has been attempting to engage in successful discussions with the management of Trump since the announcement of a 50% tariff on Brazilian imports by the US. Joesley Batista’s involvement may have facilitated these discussions and raised market optimism.
MBRF made its first appearance in Brazilian scholarship, and a new phase began in the relationship between Assaí and GPA. Last Friday, the Ibovespa closed the session almost unchanged, with a slight increase of 0.10% to 145,446 points. The commercial dollar decreased by 0.46% and ended the day at R $ 5.34.
Upcoming week: job figures and Federal Reserve announcements
The upcoming week is expected to be busier due to the release of job figures in Brazil and the USA.
The data will compete for attention with the speeches scheduled by Fed members in the US, particularly due to differences among authorities regarding risk assessment in the two mandates of the American central bank – maintaining price stability and achieving full employment, according to economic analyst Leandro Manzoni.
The Federal Reserve in the United States is split into two factions: one advocating for careful interest rate reductions led by Jerome Powell, and another highlighting concerns about weak employment numbers and potential job losses led by directors Stephen Miran, Michelle Bowmann, and Christopher Waller, who could potentially replace Powell.
The data published this week, particularly the payroll figures on Friday (3), have attracted significant interest as a result.
If job creation is lower than expected, a 50 basis point cut is likely to be maintained. If job numbers surpass expectations, the likelihood of two 0.25 percentage point cuts at the remaining 2025 meetings will decrease, as explained by Manzoni.
The market forecasts the creation of 39,000 jobs in September, a slight increase from the 22,000 jobs in August, but still not enough to be considered a strong labor market. The unemployment rate is expected to stay at 4.3%.
In Brazil, the employment figures from the Caged for August will start being published on Monday, with the Labor Minister anticipating a decrease in job creation compared to July, aiming for a total of 1.5 million new jobs by the end of the year.
On Monday, the Getulio Vargas Foundation will release the September IGP-M, which is also called rental inflation. The Central Bank will share the credit data for August along with the usual Focus Bulletin.
The IBGE’s unemployment rate data for the following day, August 30th, will be released. In July, the rate was at its lowest point in history, at 5.6%, with the total salary amount reaching a peak.
Manzoni stated that the labor market information is important for the Central Bank. A crucial factor affecting inflation expectations is a strong labor market, particularly in the service industry, leading to increased wages and prices.
The economist clarified that despite the lower-than-expected September IPCA, service inflation and its core components exhibited an annual rate significantly surpassing the 1.5 percentage point threshold set as the goal, even with the monthly decrease.
The service sector’s robustness contributes to the economy operating above capacity, as stated by the Central Bank in the latest Monetary Policy Report. The Bank predicts that the Brazilian economy will run below capacity only in the first quarter of 2027.
The BC argues that there is a restraint in the activity, as shown in both the RPM and the recent meeting.
Thus, the market will respond on Friday (3) to the August industrial production data, which showed the last positive outcome in March.
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