By Geoffrey Smith and Ana Beatriz Bartolo
Investing.com – Investing.com – Brazil and the US will publish April inflation figures for a world desperate for some signs that the US price rise has peaked. US stocks are set to open higher, however, with the certainty that 75 basis point increases in US stocks seem only a remote possibility. Walt disney (NYSE:) (SA:) reports its balance after the bell. Oil rises as Shanghai reports no new Covid cases, as the war in Ukraine disrupts Europe’s gas flows for the first time. The musical chairs in the Bolsonaro government reaches the ministries.
Here’s what you need to know in the financial markets on Wednesday, May 11th.
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1. US CPI data can show whether March was the peak of inflation
The U.S. inflation rate is expected to have eased in April as the used-car price increase from last year starts to slip out of the year-on-year calculations.
If the consensus forecast of a fall from 8.5% to 8.1% in March is confirmed at 9:30 am, there could be some much-needed relief in the bond and equity markets. However, the most important numbers will undoubtedly be the monthly increases, where core growth is expected to accelerate from 0.3% to 0.4%. A sharp slowdown from 1.2% to 0.2% is expected in the overall CPI due to a modest drop in energy prices after the March spike.
A series of speeches by Federal Reserve officials on Tuesday suggested the Fed is unwilling to put 75 basis point hikes back on the table, though Cleveland’s Loretta Mester warned that “you should never say never.” ”.
Others drew attention to the fact that the Fed’s action is already taking the heat out of the housing market, something the weekly mortgage application numbers should underscore.
2. Exchange at the Ministry
On the day of the release of inflation data measured by the , the market receives the news that President Jair Bolsonaro dismissed the Minister of Mines and Energy, Bento Albuquerque, this Wednesday morning, 11. According to a publication in the Official Gazette of the Union, Albuquerque himself would have asked for the exoneration. In his place, the head of the Special Advisory for Strategic Affairs at the Ministry of Economy, Adolfo Sachsida, was appointed.
The exchange at the Ministry comes amid Bolsonaro’s criticism of Petrobras’ (SA:) profits and pricing policy. The president raised his tone against the state-owned company in recent days, after the state-owned company registered a total of R$ 44.561 billion in the first quarter of this year and made an increase of 8.87% in the value of diesel.
In another corner of the Esplanada dos Ministérios, the Ministry of Economy calculated that state-owned companies must pay around R$99.4 billion in dividends and interest on equity to the Union between 2023 and 2025. Petrobras, in this case, will be the biggest payer. , with estimates of three annual installments of R$ 19.02 billion in the coming years, totaling R$ 57.6 billion.
Energy is one of the items that has been putting pressure on Brazilian prices.
The EWZ was up 0.17%.
3. American stock market
US equity markets are set to open higher, albeit in a holding pattern ahead of the CPI numbers, after finding at least a short-term bottom on Tuesday.
At 8:11 am, futures for the futures were up 0.84%, while the 100 and the futures gained 1.43% and 1.10%, respectively.
Stocks likely to be in focus include Coinbase (NASDAQ:) (SA:), which dropped 12% after hours on Tuesday after disappointing results. SEC chief Gary Gensler’s comments accusing cryptocurrency exchanges of trading against their clients are unlikely to help sentiment towards stocks. Also in focus are Toyota, which is expected to hit a two-month low after detailing a series of Covid-related factory closures, and Electronic Arts (NASDAQ:), which held up well amid general technology weakness this quarter.
The first balance sheets to be released on Wednesday include Fiverr International (NYSE:), Perrigo Company PLC (NYSE:) (SA:), Krispy Cream Inc (NASDAQ:) and The Wendy’s (NASDAQ:). Walt Disney must have a top billing show after the bell.
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4. US House Approves $40 Billion Agreement with Ukraine
The House of Representatives passed a $40 billion aid package for Ukraine, but the bill faces delay in the Senate over complaints of a lack of detail and concerns that it could be linked to another bill funding Covid-19 measures. 19.
The package includes about $18.7 billion in military aid, equivalent to about a quarter of Russia’s entire defense budget last year.
Meanwhile, in Ukraine itself, the flow of gas to Europe fell after pipeline operator Naftogaz accused Russian entities in occupied parts of eastern Ukraine of illegally diverting gas destined for others. European natural gas prices soared at the opening but quickly reversed. The long-term question of how to replace Russian gas this winter remains unanswered, however.
5 Oil rises with signs of hope in Shanghai
Crude prices rebounded after Chinese health officials reported that Shanghai had no new Covid-19 cases on Tuesday, ending a two-month lockdown. Shanghai’s troubles have spread to the economies of neighboring regions, causing a sharp drop in Chinese oil demand in recent weeks.
At 8:14 am, U.S. crude futures were up 3.5% at $103.25 a barrel, while crude was up 3.23% at $105.77.
The US publishes official inventory estimates at 11:30 am. Figures from the American Petroleum Institute showed an unexpected increase of 823,000 barrels in oil inventories, adding to the evidence that record gasoline and diesel prices are hurting demand.
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