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SÃO PAULO – The Ibovespa Futuro opens in decline this Thursday (17) after the negative performance of the futures of the United States stock exchanges. While yesterday’s signal from the Federal Reserve that interest rates will stay near zero for the next three years is good for the market, investors are concerned about the lines of all this monetary easing.
He fears the Fed is so docile (favorable to the use of monetary policy to stimulate the economy) because the outlook for post-pandemic economic activity is bleaker than the authorities want to show.
Here, the Monetary Policy Committee (Copom) did what was expected and kept the basic interest rate, Selic, at 2% per year. The economists’ assessment is that the statement continues to reinforce a facing forward that interest rates will stay low for a long time.
At 09:08 (Brasilia time) the Ibovespa futures contract for October had a drop of 0.87%, to 98,830 points.
The future dollar for October rose 0.52% to R $ 5,268.
In the future interest market, the ID of January 2022 has dropped two basis points to 2.87%, the ID of January 2023 gains three basis points to 4.26%, the ID of January 2025 advances five basis points at 6.16 % and the DI for January 2027 varies positively seven basis points at 7.16%.
Another highlight is the news that President Jair Bolsonaro was summoned by the Federal Police to testify in the investigation investigating the complaint by former Justice Minister Sergio Moro for alleged interference in the body. In response, President Jair Bolsonaro with an appeal to the Federal Supreme Court (STF) asking him to render his statement in writing.
In the oil market, prices are falling due to concerns about low demand for fuel. WTI falls 0.30% to $ 40.04 a barrel, while the Brent rate falls 0.31% to $ 42.09 a barrel. Iron ore is also falling. Futures traded on the Dalian Stock Exchange closed down 2.71% to 790,000 yuan, equivalent to $ 116.69 today.
President under pressure
President Jair Bolsonaro was summoned by the Federal Police to testify in the investigation that investigates the complaint by former Justice Minister Sergio Moro for alleged interference in the body. In response, President Jair Bolsonaro with an appeal to the Federal Supreme Court (STF) asking him to render his statement in writing.
PF’s letter summoned the president to an act of interrogation on September 21, 22 or 23, 2020, at 2 pm. According to State of S.Paulo, the request to testify in writing was based on a 2017 decision that allowed Michel Temer to do the same.
At the same time, the PF intimidated the president’s children – Councilor Carlos Bolsonaro (Republicans-RJ) and Federal Deputy Eduardo Bolsonaro (PSL-SP) – to testify as witnesses in the investigation investigating the conduct of anti-democratic acts. The request for an investigation was presented after acts that defended the closure of the National Congress and the STF, in addition to anti-democratic guidelines.
Another highlight is the information that the president intends to cut billions of dollars in spending on Education, social programs and ministries such as Agriculture to promote the Pro-Brazil Plan for public investments and other actions sponsored by the National Congress.
In accordance with The state of São Paulo, the cut was defined at a meeting of the Budget Execution Board (JEO). The Ministry of Regional Development (MDR) and the Ministry of Infrastructure will receive R $ 1.6 billion each. Congress will have R $ 3.3 billion. In cuts, the largest reduction, of R $ 1.57 billion, is foreseen in the Ministry of Education. The Ministry of Defense was cut by R $ 430 million.
New social program
Yesterday, Senator Márcio Bittar (MDB-AC), rapporteur for the 2021 Budget, said that the president authorized the creation of a new social program in his report. However, it avoided detailing values and sources of funds to make the program feasible.
Furthermore, it was reported that the second phase of payment of the emergency aid of R $ 300, which runs until December, will leave out a universe of six million people, according to estimates by the Ministry of Citizenship.
The market follows in the footsteps of the government’s economic team. Yesterday, the team of Economy Minister Paulo Guedes held a four-hour meeting in Brasilia, but did not speak to the press.
According to Folha de S.Paulo, the minister changed his strategy and wants the president to back his proposals, with party leaders, before they are published. On Tuesday (15), Bolsonaro threatened the Guedes team with a “red card” if proposals were presented to create Renda Brasil with cuts in other social programs.
There are rumors about a possible departure of the special secretary of Finance, Waldery Rodrigues. He was the one who spoke about a possible pension freeze to support Renda Brasil, but the measure was publicly criticized by the president, who decided to put an end to plans to create the program.
In accordance with Or Balloon, Guedes awaits a request for resignation from the secretary, and the economic team would be trying to build an honorable exit for Waldery, such as a position in an international organization, for example.
Corporate radar
In the corporate news, Copel announced that the minimum sale price for Copel Telecomunicações will be R $ 1.4 billion. The auction by the company must take place on November 9, 2020. Another highlight was the raising of US $ 500 million by BRF in the foreign market, through senior bonds.
Furthermore, the risk rating agency Moody’s raised Eletrobras’s rating from “Ba3” to “Ba2”. The agency also raised the company’s basic credit rating (BCA) from “b1” to “Ba3”. The outlook for all ratings changed from positive to stable. Investors today expect Cury’s IPO price per share after the book build.
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