Ibovespa Flat Ahead of Central Bank Decisions and Earnings

The Ibovespa traded near the flat 190,000 level on Monday as investors prepared for a week of earnings and central bank decisions. Brazil’s central bank is set to announce its decision on Wednesday, with markets expecting a 0.25 percentage point cut in the Selic rate despite the recent jump in the headline inflation. In turn, the US Fed is set to hold rates unchanged. Global oil prices rose due to stalled US-Iran peace talks, heightening inflation concerns and leading investors to largely rule out rate cuts in developed markets this year. Major banks traded near flat, with Bradesco and Banco do Brasil each up 0.2%. Petrobras gained 0.5% on higher oil prices. Gerdau (+1%) is scheduled to release earnings today after the close, Vale (+0.1%) will report on Tuesday, and WEG is set to announce results on Wednesday.

The Ibovespa fell 0.3% to close at 190,745 on Friday as investors monitored the standoff between the US and Iran. Tehran demonstrated control over the Strait of Hormuz in response to the US blockade, with few signs of reopening soon. Brent prices remained high, threatening to exacerbate inflation fears and global growth concerns while pressuring major banks and the broader index. Bradesco lost 0.6% and Banco do Brasil shed 1.3%. Petrobras dropped 1.3% after relinquishing strategic rights in Braskem, which rose 1.2%. In other news, Suzano (-2.2%) will increase pulp prices for customers in Europe and the Americas starting in May, amid rising costs from the Middle East conflict. On the upside, Usiminas gained 4.4% after more than doubling Q1 profits to R$896 million. Sabesp edged up after receiving approval from Brazil's competition authority to assume 100% ownership of Paulista Geradora de Energia.

The Ibovespa edged down to the 191,000 mark on Friday amid international market nervousness over Middle East tensions, as investors monitored a standoff between the US and Iran. Tehran responded to the US blockade by demonstrating its control over the Strait of Hormuz, with few signs the strait will reopen soon. Brent remained near $105, threatening to exacerbate inflation fears and global growth concerns while pressuring major banks and the broader index. Itaú and Bradesco edged lower, while Banco do Brasil fell over 1%. Meanwhile, Petrobras shed more than 1.5% after relinquishing its strategic rights in Braskem, which gained 1.8%. Other notable laggards included Ambev, down 1.1% and Rede D'Or, down 0.5%. On the upside, Usiminas surged about 7.5% after more than doubling profits in Q1 to R$896 million, while Sabesp gained over 1.5% after obtaining approval from Brazil's competition authority to assume 100% ownership of Paulista Geradora de Energia.