Ibovespa future operates between losses and gains with worsening inflation in the US; Future interest rates rise after April’s IPCA

The Ibovespa future operates on the positive ground for the first trades this Wednesday (11), following a recovery movement abroad. Inflation is the focus of the daily news as investors continue to monitor lockdowns in China, the unfolding of the war in Ukraine, and the next steps that the Federal Reserve may take in its monetary tightening policy, after today’s indicators.

Here in Brazil, the day has already started busy with the release of the Broad Consumer Price Index (IPCA) for April, with a monthly high of 1.06% compared to March. The number was once again high, with the biggest change for April since 1996, but practically in line with what the market expected (monthly increase of 1%). In the annual comparison, inflation measured by the IPCA increased by 12.07%.

The main indicator of the day for the American market is the Consumer Price Index (CPI). The inflation indicator grew 0.3% in April compared to March, above expectations. The Refinitiv consensus projected a monthly increase of 0.2% and an annual increase of 8.1% (came in at 8.3%).

At 9:38 am (Brasília time), the Ibovespa futures for June zeroed the gains and operated a slight drop of 0.07%, at 104,275 points.

The commercial dollar also reversed sign and started to rise 0.49%, to R$ 5.158 in the purchase and R$ 5.159 in the sale.

Futures interest rose after the release of the April IPCA: DIF23, +0.12 pp, at 13.38%; DIF25, +0.19 pp, at 12.48%; DIF27, +0.15 pp, at 12.33%; and DIF29, +0.14 pp, at 12.44%.

In the United States, stock futures indexes rose earlier, however, the gains were zeroed and the sign reversed after the worse-than-expected inflation data. Dow Jones futures were down 0.08%, while the S&P 500 and Nasdaq futures were down 0.06% and 0.31%, respectively.

The US Department of Energy cut its forecast for a rise in US oil production from 833 million to 731 million barrels a day. As a result, a barrel of Brent for July rose 3.71% to US$ 106.28. WTI for June rose 4.09% to $103.77.

Iron ore, in turn, was traded at US$ 122 on the futures market of the Chinese Dalian Stock Exchange, up 5.32%.

Corporate news drives Europe

Rates rise for the second day in a row, with Philip Morris’s $16 billion bid for Swedish tobacco company Swedish Match; and after German conglomerate Thyssenkrupp raised sales and operating profit projections for 2022.

The recovery of European stock markets comes after a liquidation movement, motivated by concerns about a tighter monetary policy in the United States and lockdowns in China.

This Wednesday, the President of the European Central Bank, Christine Lagarde, said that the monetary authority should end its stimulus program to buy bonds at the beginning of the third quarter. A rise in interest rates may follow soon after.

Read more: CPI: Inflation rate in Germany accelerates to highest level since 1981

The Stoxx 600 index, which has shares of companies from 17 European countries, advanced 1.45%.

Asian stocks close higher

In China, stock markets were also boosted by the country’s inflationary indicators. The Chinese producer price index rose 8% in April, slowing its pace from March, when it grew 8.3%.

Although the number was below market consensus, it remained relatively “benign” in the face of rising global commodity-related costs. The slowdown raises expectations that Chinese authorities will have room to adopt stimulus measures, in order to combat restrictions by the coronavirus.

Read more: WHO criticizes China’s ‘Covid zero’ policy: ‘Unsustainable’

The consumer price index increased 2.1% in April, accelerating in relation to March, when the indicator increased 1.5%. Inflation reflects, above all, a rise in food prices, after the imposition of new lockdowns in Chinese cities, with the biggest outbreak of Covid-19 in the country since the beginning of the pandemic.

Technical analysis by Pamela Semezatto, investment analyst and day trader specialist at Clear Corretora

Ibovespa

“It continues with no defined trend and strong sales. The next support of 100,000 may show a better definition. If you hold in this region, the lateralization continues in an uptrend. If it breaks the 100,000, a bearish pivot will be triggered and would confirm a medium/long-term downtrend.”

Dollar

“Yesterday didn’t show much strength to continue the bullish move, but it remains above the R$5,130 support, which indicates higher levels until the next resistance at R$5,270.”

Purchase opportunity? XP Strategist Reveals 6 Cheap Stocks to Buy Today. Watch here.