Futures Ibovespa accelerates fall after higher-than-expected US employment data; dollar starts to rise

The Ibovespa futures left stability and started to have losses this Friday (5), in line with New York futures indices, after the release of US employment data at 9:30 am (Brasilia time), the main indicator of the day. .

The United States created 528,000 jobs outside the agricultural sector in July, bringing the unemployment rate down to 3.5%. The result was above the market consensus, which projected the creation of 250,000 jobs and an unemployment rate of 3.6%, according to Refinitiv. Market analysts had highlighted the payroll as crucial for the Federal Reserve to decide on the next monetary policy steps.

The higher-than-projected numbers could indicate that the Fed may have to raise rates further, while the expected slowdown, which did not happen, could ease pressure on the central bank to adopt a third 0.75 percentage point interest rate hike. at its next meeting in September, though much will depend on inflation and employment readings in the run-up to that meeting.

According to CME Group data, the probability for a 0.75 percentage point increase at the next Fed meeting was 63.5% (from 34% yesterday), while the probability of a 0.50 percentage point hike dropped to 36, 5% (against the possibility of 66% the day before).

As a result, at 9:45 am (Brasilia time), the Ibovespa futures maturing in August was down 0.44%, at 106,420 points.

The commercial dollar rose 0.6%, to R$5.251 in the purchase and R$5.252 in the sale, after opening slightly lower. The dollar futures for August was up 0.95%, at R$5.298.

In the US, Dow Jones Futures was down 0.41%, S&P Futures down 0.76% and Nasdaq Futures down 1.03%.

Most European stocks were lower in the morning, also awaiting US employment data, and the trend also continued. On Thursday, the Bank of England raised interest rates by 50 basis points, predicting UK inflation will peak above 13% in October and the economy will enter a prolonged recession in the fourth quarter.

Asian markets closed higher as investors eased risk aversion after a week marked by Chinese military exercises following a visit by US House Speaker Nancy Pelosi.

Taiwan’s Taiex jumped 2.27% to 15,036.04, with chipmaker TSMC up 3.2%. The index traded lower this week as US-China tensions increased during Pelosi’s trip.

Markets have not reacted on this date to China’s exercises around Taiwan. Japanese Defense Minister Nobuo Kishi, meanwhile, said Chinese missiles had landed in Japan’s exclusive economic zone and called the military exercises a “serious problem,” according to a report by NBC News.

On the commodity side, oil prices are down after hitting their lowest level since before Russia’s invasion of Ukraine in February last session, as the market worried about the impact of inflation on global economic growth and demand.

Iron ore prices rise again after falling the day before, in the face of concerns about demand in China.

Analysis by Pamela Semezzato, investment analyst at Clear Corretora

Ibovespa

“It closed yesterday with a high of 2.04% and broke the LTB with a good candle, indicating that it remains strong in buying. It has already reached the resistance region of 106 thousand points and the next point would be at 109 thousand points. Still stretched high and no trend definition, but no sell signals for now.”

Dollar

“It managed to close below the day 3 candle, which suggests an attempt for a new bearish leg, which will be confirmed if it breaks the previous bottom at R$ 5,170. With no defined trend, in the very short term, it continues to show strength in sales.”

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About Abhishek Pratap

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