Five hot topics for Brazil next week

Food Consumption Inflation
After lower-than-expected IPCA reducing bets on accelerating the Selic hike, the market checks whether the partial figures for October will corroborate the idea of ​​a peak in inflation last month (Image: Reuters/Ricardo Moraes)

Market monitors activity and inflation data next week after recent retail sales, industrial production and IPCA fall below estimates.

US USA, Fomc minutes, speeches by Fed members and CPI set the tone after the payroll frustrates expectations but does little to benefit the real.

Data in China and debates on the fiscal issue in Brazil could also move assets. Week should start with low liquidity ahead of holiday on Tuesday. See the main themes:

Peak inflation?

After IPCA below forecast, reduce bets on accelerating the rise of the Selic, the market checks whether the partial numbers for October will corroborate the idea of ​​a peak in inflation last month, as has been considered by analysts and by the BC itself. IPC-Fipe of the 1st quadris Semana of the month comes out on Monday and the IGP-10 of October will be released on the 15th.

The first partial of October inflation, by the IPC-S until the 7th, was released this Friday and reached 1.43%, the same level as the previous period and above the estimate of 1.34%.

Services and IBC-R

Frustration with industrial production and retail sales figures leaves the services volume indicator with the possibility of saving August from a weaker activity performance.

The data comes out on the 14th and has an estimated increase of 15.3% in the annual comparison, compared to 17.8% in the previous month. The following day, the IBC-Br will be released, taken as the monthly GDP proxy. The median estimate for the data is for a deceleration, from +0.6% to +0.1% in the monthly comparison and from +5.53% to +4.10% in the annual comparison.

CPI and Fed Signals

Investors will monitor the level of inflation and any signs of Fed in the coming days, as the September payroll was not seen as enough to change the stakes on the November tapering announcement.

Yields accelerate again after an initial reaction of relief to the employment data. CPI comes out on the 13th and PPI on the following day, while retail sales data will be highlighted among activity numbers.

Signals of the Fed can be taken from the minutes of the Fomc, also on the 13th, in addition to the speeches of directors of the American BC such as Evans, Bostic and Harker throughout the week. China will release trade balance and inflation data in the coming days.

PEC of court orders

The PEC of the precatório should only be voted on October 19 in the special commission, after a request for views, says Valor. The topic remains on the radar of investors, who assess possible fiscal risks and are alert to any new developments.

The opinion presented yesterday by Hugo Motta (Republicans-PB) accompanied the agreement that had been announced by the presidents of the Chamber It’s from Senate with Paulo Guedes, to limit payments to around R$40 billion.

Requisitions of small value will have priority, and precatories that are not paid will enter a queue. Among the novelties of the text, there is the forecast of installment payment of social security debts of municipalities, according to the report.

Companies

ABC Brazil Bank (ABCB4), recently upgraded to outperform by Itaú BBA, promotes a public meeting with analysts to disseminate strategies, new initiatives and perspectives for the future on October 14th.

Next week has the expected debut of the shares of the trade, as well as a national holiday for the Patron Saint’s Day on Tuesday. B3 will have options expiration on Ibovespa the 13th and stock options expiration on the 15th.