The dollar closed virtually unchanged, and the Brazilian stock market ended lower on Monday (11th), in a trading session marked by investor caution due to the escalating tensions between the United States and Iran. The US currency held steady, remaining below R$ 4.90, but the Ibovespa index was pressured by the rise in oil prices and growing concerns about inflation and interest rates.
The Ibovespa index, from B3, fell by 1.19%, to 181,908 points, recording its lowest closing level since March 27th. The index was primarily pressured by stocks sensitive to interest rates, amid fears that the rise in oil prices could make it more difficult to cut the Selic interest rate.
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The market also followed the corporate earnings season, but even strong results failed to prevent losses in shares of major companies. Investors remain attentive to the outflow of foreign capital from the Brazilian stock market in the early days of May.
The worsening inflation outlook reduced optimism about the local stock market. The continuation of the war in the Middle East and the possibility of maintaining high interest rates in the United States also contributed to the risk-averse sentiment.
Cautious exchange rate
The spot dollar closed the day at R$ 4.891, with a slight…
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The dollar closed virtually unchanged, and the Brazilian stock exchange ended lower on Monday (11th), in a session marked by investor caution amid escalating tensions between the United States and Iran. The US currency remained resilient, staying below R$ 4.90, but the Ibovespa index was pressured by the rise in oil prices and growing concerns about inflation and interest rates.
The Ibovespa index, from B3, fell by 1.19%, to 181,908 points, registering the lowest closing level since March 27th. The index was mainly pressured by stocks sensitive to interest rates, due to fears that the rise in oil prices could make it more difficult to cut the Selic interest rate.
The market also followed the corporate earnings season, but even robust results failed to prevent losses in shares of large companies. Investors remain attentive to the outflow of foreign capital from the Brazilian stock exchange in the first trading days of May.
The worsening inflation outlook reduced optimism about the local stock market. The continuation of the war in the Middle East and the possibility of maintaining high interest rates in the United States also contributed to the risk-aversion sentiment.
Cautious Exchange Rate
The spot dollar closed the day at R$ 4.891, with a slight decrease of 0.10%, the lowest value since January 15, 2024. Despite the stability in the domestic market, the US currency maintained gains against other emerging market currencies abroad after the United States rejected Iran's proposal to end the war in the Middle East.
During the session, the exchange rate fluctuated within a narrow range. The currency reached a high of R$ 4.9059 in the morning and a low of R$ 4.8858 before returning to near stability. The dollar futures contract for June closed virtually unchanged on B3.
The moderate reaction of the Brazilian market was attributed to the interest rate differential between Brazil and the United States, which continues to favor the inflow of foreign capital. The Focus Bulletin, a weekly survey by the Central Bank with financial institutions, showed a reduction in the projection for the dollar at the end of the year, from R$ 5.25 to R$ 5.20.
Analysts also highlighted the low liquidity of the trading session and the absence of stronger bets amid geopolitical uncertainty. Abroad, the DXY index, which measures the performance of the dollar against a basket of strong currencies, remained close to stability.
Oil Prices Rise
With the diplomatic impasse, oil prices rose again in the international market. A barrel of Brent, the benchmark for Petrobras, rose by 2.88% and closed at US$ 104.21. WTI, from Texas, rose by 2.78%, to US$ 98.07.
The rise in oil prices reinforced the perception of global inflationary pressure and increased doubts about the pace of interest rate cuts in various countries, including Brazil.
War Back on the Radar
International tensions returned to the forefront after US President Donald Trump described Iran's proposal to end the conflict as "totally unacceptable."
Trump also stated that the ceasefire is "on life support," while Iranian officials said that the country is prepared to respond to new attacks.
The scenario increased concerns about global inflation and potential impacts on the world economy.
* with information from Reuters