Treasury Direct: on Super Wednesday, bond rates rise and return to March level

This Wednesday (4th) session is for monetary policy decisions in Brazil and the United States. Here, the market consensus expects the Selic to be raised by 1 percentage point to 12.75%, at the meeting of the Monetary Policy Committee (Copom), of the Central Bank.

The big question remains regarding the next steps. A part of the market believes that the monetary authority should leave the door open at today’s meeting for further adjustments, but without committing again to some percentage increase in June.

In the United States, the expectation is that the adjustment is 0.50 percentage point. Investors’ eyes, however, will be focused on the speech of Jerome Powell, chairman of the Federal Reserve (Fed), the American central bank. It is expected that he will give more signals about the pace of monetary tightening, given the strong inflationary pressures.

After days of speculation on the subject, Ursula von der Leyen, president of the European Commission, today proposed a gradual ban on Russian oil imports. The measure still needs to be approved by the 27 member states. If that happens, it should be a game-changer for the world’s biggest trading bloc.

In the Treasury Direct, the interest offered by public bonds advance on the morning of this Wednesday (4). Among the fixed rate papers, the highest return was paid by the Fixed Rate Treasury 2033, with a half-yearly coupon, in the amount of 12.39%, above the 12.32% seen the day before.

As a result, the rates delivered by some papers returned to approach the level seen at the beginning of March this year. In the case of inflation-linked securities, the real remuneration paid by the IPCA+2055 Treasury rose from 5.80% to 5.84% at 9:20 am today.

Check the prices and rates of all public securities available for purchase at the Treasury Direct that were offered this Wednesday morning (4):

Source: Direct Treasure

US jobs, Russian oil and commodities

On the foreign scene, one of the highlights is the announcement that the United States created 247,000 jobs in the private sector in April, according to the ADP Employment Report this Wednesday (4th).

The result was below expectations. The median of economists’ projections compiled by Refinitiv pointed to the creation of 395,000 jobs. In March, 479,000 jobs were opened, according to revised data (previously 455,000).

In an interview with InfoMoneyMarcello Curvello, currency manager at ASA Hedge, at asset manager ASA Investments, said the latest indicators in the US are reinforcing a more aggressive stance by the Fed on rate hikes.

In ASA projections, US interest rates are expected to rise by up to 2.5% by the end of this year and reach 3% a year in 2023.

This adjustment should continue to impact the flow of foreign capital to the Stock Exchange, which ended negative in April. “This does not speak to a ‘blue sky’ and positive flow for risk assets, especially for emerging assets,” said Curvello. “My expectation when I analyze data from the external sector and balance of payments is that this flow of variable income will collapse to zero”.

Another highlight on the international scene is the embargo proposed today by the European Union to stop Russian oil imports. “Putin must pay a price, a high price, for his brutal aggression,” European Commission President Ursula von der Leyen told the European Parliament.

The Commission’s measures include phasing out supplies of Russian crude within six months and refined products by the end of 2022. Von der Leyen has promised to minimize the impact on European economies.

Ambassadors from the 27 EU governments are expected to adopt the Commission’s proposals as early as this week, allowing them to become law soon after.

In this scenario, crude oil futures soared earlier in the session. At around 9:40 am ET, Brent was up 3.49% to $108.73, while WTI was up 3.82% to $106.33.

Elections, fine to Daniel Silveira and summons of police

On the local political scene, Rodrigo Pacheco (PSD-MG), president of the Senate, said yesterday (3) that he intends to meet with Paulo Sérgio Nogueira de Oliveira, Defense Minister, and commanders of the Armed Forces, amid the worsening crisis between the three Powers, threats to institutions and tensions around the October general elections.

Pacheco defended, after a meeting with the president of the Federal Supreme Court (STF), Luiz Fux, that institutions have a duty to dialogue to guarantee elections and a democratic environment. He also warned that climate contamination due to the proximity of the elections must be avoided, in order to avoid what he considers “anomalies”, citing attacks on institutions and democracy.

Also in the political field, Alexandre de Moraes, minister of the Federal Supreme Court (STF), imposed a fine of R$ 405 thousand on deputy Daniel Silveira (PTB-RJ) for failing to comply with the precautionary measures imposed on him by the Court. Moraes also said that the deputy is still obliged to wear an electronic anklet.

Also noteworthy is the information from the newspaper Folha de S.Paulo, which says that there is an agreement to summon 625 agents to the Federal (PRF) and Federal (PF) Highway Police. The day before, President Jair Bolsonaro (PL) had said that he could open up to 1,000 vacancies for each career this year.