European markets operate slightly higher, while most Asian stocks closed lower on Monday (20), as investors reflect on economic uncertainty. US markets are closed for the Juneteenth holiday.
The tepid trading in today’s session comes after a turbulent week of trading with a flurry of central bank stocks.
The US Fed raised its policy rate by 75 basis points, its highest since 1994, before the Swiss National Bank surprised markets with its first hike since 2007 and the Bank of England implemented its fifth consecutive rate hike.
After an emergency meeting last Wednesday, the European Central Bank also announced that it plans to create a new tool to tackle the risk of eurozone fragmentation, a move aimed at allaying fears of a new debt crisis for the bloc. of the single currency.
In China, prime rates on one-year and five-year loans were maintained after the country’s central bank meeting Monday. This matched the prediction in a Reuters poll, in which the vast majority of respondents predicted no change to one-year or five-year LPRs.
In Brazil, investors await the Copom minutes tomorrow to adjust bets at the end of the monetary tightening, which can be explained by the BC’s willingness to abandon the 2023 target. (24).
On the political front, the open war against Petrobras (PETR3;PETR4) by the government and Congress continues under the spotlight, with Arthur Lira threatening to double the company’s CSLL and implement an export tax to compensate for the rise in fuel prices.
The proposal will be discussed at the meeting of party leaders that Lira called for this Monday (20th) to discuss Petrobras’ pricing policy, which is currently linked to the international market.
Check out more highlights:
1. World Scholarships
Markets in the US are closed this Monday (20) for a holiday. The S&P 500 last week had its worst week since 2020, as investors grappled with the prospect of a potential recession ahead as major central banks such as the Fed raise rates to fight inflation. Mini futures contracts have a slight increase on this date.
See the performance of futures markets:
- Dow Jones Futures (USA), +0.43%
- S&P 500 Futures (US), +0.65%
- Nasdaq Futures (US), +0.77%
Asian markets mostly closed in the red as investors monitored the market’s reaction to the release of China’s latest benchmark interest rates.
In South Korea, Kospi led losses among major markets in the region as it fell 2.04% to close at 2,391.03, with shares of Samsung Electronics falling and chipmaker SK Hynix falling close to 2% each. .
China’s one-year and five-year prime lending rates were maintained.
- Shanghai SE (China), -0.04%
- Nikkei (Japan), -0.74%
- Hang Seng Index (Hong Kong), +0.42%
- Kospi (South Korea), -2.04%
European markets trade cautiously higher on Monday, after a tumultuous week of trading last week.
On the European data front, German producer prices rose 33.6% year-on-year in May, their biggest increase on record, according to new official statistics published Monday.
Renault shares rose more than 6% on Monday after Jefferies raised the recommendation for the French automaker’s shares to “buy” from “hold”.
- FTSE 100 (UK), +0.66%
- DAX (Germany), +0.61%
- CAC 40 (France), +0.05%
- FTSE MIB (Italy), +0.58%
Oil prices fell on Monday, reversing previous gains, as concerns over slowing global economic growth and demand for fuel offset concerns over tight supplies.
- WTI Oil, -0.58% at $108.87 a barrel
- Brent crude, -0.94% at $112.06 a barrel
- Iron ore traded on the Dalian Exchange was down 10.98% to 746.00 yuan, equivalent to US$111.54
- Bitcoin, +10.11% to $20,523.01 (from 24 hours ago)
On the domestic agenda for the week, attention should be paid to the minutes of the last meeting of the Monetary Policy Committee (Copom) – which raised the Selic rate by 0.5 point, to 13.25% per year. In the statement that accompanied the announcement of the decision, the Central Bank projected a new adjustment in the basic interest rate of equal or lesser magnitude. The minutes will be published on Tuesday (21), and may bring new information about its next decisions and the Selic terminal point.
The IPCA-15, considered a preview of official inflation, for June will be released on Friday (24). Itaú anticipates a monthly increase of 0.74%, taking the annual rate to 12.10% (from 12.20% in May). Bradesco expects a monthly increase of 0.73%, with cores still under pressure.
Read too: Copom Minutes, IPCA-15, discussion on fuel prices and Fed statements: what to follow this week
Regarding economic activity, Itaú highlights that the week will be relatively empty, with only the FGV consumer confidence survey for June, to be released on Friday.
Abroad, pay attention to speeches by Federal Reserve officials and early June polls. Jerome Powell, chairman of the Fed, speaks in the US Senate on Wednesday (22) and in the House on Thursday (23), while several regional presidents speak throughout the week.
On Thursday, the first readings of the June industrial PMI index for the Euro Area, the United Kingdom and the US are released.
8:00 am: weekly IPC-S
3pm: Weekly trade balance
7:00 pm: Paulo Guedes, Minister of Economy, meets with the president of the Brazilian Association of Supermarkets (Abras), João Galassi, and representatives of the supermarket sector
3. Offensive against Petrobras continues
The president of the Chamber, Arthur Lira (PP-AL), made new threats to Petrobras this Sunday because of its fuel price policy and demanded respect from the state company to the Brazilian people. On social media, Lira said that if “Petrobras decides to face Brazil, let it prepare itself: Brazil will face Petrobras”.
“We don’t want confrontation, we don’t want intervention. We just want respect from Petrobras to the Brazilian people. If Petrobras decides to face Brazil, let it prepare itself: Brazil will face Petrobras. And it’s not a threat. It’s an encounter with the truth,” he posted on Twitter.
The speech represents a new chapter in the offensive by the federal government and its allies against Petrobras. On Friday, the state-owned company announced a new increase in fuel prices, which led the government, Congress and Minister André Mendonça, of the Federal Supreme Court (STF), to criticize the company.
President Jair Bolsonaro defended a Parliamentary Commission of Inquiry (CPI) to investigate Petrobras. Lira, on the other hand, threatened to double the taxation of the company’s profits and said that the new high was a retaliation for the resigning president of the state-owned company, Mauro Coelho, while Minister André Mendonça, of the STF, asked for explanations about the pricing policy.
The rise in fuel prices is seen as one of the main obstacles to the project for the reelection of the Chief Executive.
Petrobras privatization project is almost ready, says columnist
The Ministry of Mines and Energy has almost finished a bill proposing the privatization of Petrobras, in a way that resembles the recently completed capitalization of Eletrobras (ELET3; ELET6), according to columnist Lauro Jardim/O Globo.
According to Jardim, Minister Adolfo Sachsida is only waiting for a favorable political moment, in addition to the approval of President Jair Bolsonaro, to send him to Congress. Also according to the journalist, in Sachsida’s assessment, the new fuel price adjustment, valid since Saturday, only helps the project.
High in diesel will increase freight, points out NTC&Logística
The National Association of Cargo Transport and Logistics (NTC&Logística), which represents 15,000 transport companies, informed that the new diesel increase announced by Petrobras will entail an additional readjustment of at least 5% in the value of freight, a factor that must be applied on an emergency basis.
Last Sunday (19), Brazil recorded 47 deaths and 9,376 cases of covid-19 in 24 hours, according to information from the consortium of press vehicles, at 20:00.
The moving average of Covid deaths in 7 days in Brazil stood at 133, an increase of 73% compared to the level of 14 days earlier.
The moving average of new cases in seven days was 32,581, which represents an increase of 10% in relation to the level of 14 days before.
The consortium of press vehicles will not disclose vaccination data in the country on Thursday (16), Friday (17), Saturday (18) and Sunday (19), re-publishing the data on Monday (20).
5. Corporate Radar
Petrobras (PETR3;PETR4) announced that minority shareholders have nominated candidates for the board of directors: José João Abdalla Filho and Marcelo Gasparino da Silva.
Klabin (KLBN11) approved the issuance of R$ 2.5 billion in debentures, in the context of a securitization transaction, with a rate corresponding to NTN-B 2032 + 60 bps or IPCA + 6.30% and a maximum term of up to 12 years old.
The debentures will be the subject of a private placement, fully subscribed by a securitization company and later linked to agribusiness receivables certificates (CRAs), which will be subject to a public offering with restricted placement efforts, in accordance with applicable regulations.
Nine of the ten members of the Eletrobras Board of Directors presented a letter of resignation, according to a material fact disclosed by the company. Eletrobras underwent a recent capitalization process.
(With Estadão, Reuters and Agência Brasil)
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