The interactive financial markets of Brazil are watching global events with great care at the same time as they are facing peculiar domestic issues and opportunities.
The Maduro Inflation Index (IPV-Fipe) exhibited standing iron at 0.24% indicative of low cost of living executing throughout the year so if it continues like that central bank’s policy will have more interest on raising the interest rate in the near future than in decrease.
Brazilian currency stood fortified against the U.S. dollar this week as it jumped to R$5.75 as investors seemed encouraged by the slackening of global trade hostilities and the likelihood of the Fed easing monetary policy. This more valuable real conveys that investors’ trust has strengthened as they view Brazil’s economic growth potential as higher.
Economic signals from the commodities sector gave Brazil a clear picture, i.e., digitally. Oil traded at US$ 13.17 less than $ 68.89; the two reasons are governed by the fact that there are more crude inventories in the US and peace talks due to the conflict areas.
Therefore, it will be impossible to cut back the margins of Petróleo Brasileiro S.A. (Petrobras), but with global demand on that score of energy products being robust, it looks positive for buying stocks and commodities in the spider segment.
Conversely, gold prices remained firm at 83,833 per ounce despite the unreadable geopolitical challenges, which is a good thing for investors who see such an asset as a safe haven.
From the corporate point of view, having Embraer’s stocks rocket sky-high is an impressive result of striking a strategic deal with Fly Across MRO and delving into Mexico. Through this joint venture, Embraer reinforces its position as the main company in the air travel sector in Latin America.
At the same token, the prospect of a deficit in the public sector caused by political spending threatens, at this point, to obscure Brazil’s economic perspective.
Morgan Stanley is yet to pass on the message of the incoming crash caused probably by the political parties seeking higher budget funds to attract more voters that, with an increase in the candidateʼs, will produce fiscal constraints leading to a hard time in the next couple of years.
With the various prevailing uncertainties Brazil is facing, it rooks now come to offer a duck it of the somehow, out valuable one will on a stage in all major cities and, at best, the attraction of foreign investment.
Markets as soon as they take up today’s global economic data and pay attention to domestic indicators like inflation trends. Brazil will be lucky to have opportunities as well as risks that are functioning and will define its financial nature in the future.
