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© Reuters
By Geoffrey Smith and Ana Carolina Siedschlag
Investing.com – Treasury yields rise and fall to new lows against everything from cryptocurrencies to, as markets turn to cyclically growing stocks.
The exterior is ignored here, watching over Petrobras (SA :). Oil falls with Texas oil production returning to normal and the president wants to talk to Iran.
Here’s what you need to know about the financial markets on Friday, February 19.
1. Ibovespa futures against abroad; Petrobras in focus
Ibovespa Futures fell 0.63% at the start of the trading session this Friday, with investors looking at Petrobras.
President Jair Bolsonaro announced that as of March 1 he will leave federal diesel taxes zero after the “excessive” and “out-of-the-curve” increase in prices charged by the state company. He said the measure “will have consequences”, although it cannot interfere with the company.
The 15.2% increase for diesel and 10.2% for gasoline was the highest under the administration of state-owned company Roberto Castello Branco, according to Valor Econômico.
André Perfeito, Necton’s chief economist, wrote in a note that the president would be flirting “with a certain fiscal populism and making a direct threat to Petrobras that will force investors to act with caution.”
For XP analysts, in a preliminary calculation, the reduction of federal diesel taxes, at the current price and sales volume levels, would represent an income exemption of around R $ 1.5 billion per month.
Journalist Miriam Leitão, from Grupo Globo, said in her column on CBN radio that Bolsonaro intends to fire the president of Petrobras. However, the measure must be approved by the State Board of Directors, which prevents a more immediate decision by the Brazilian representative.
US stocks will open higher after taking a hit in jobless claims data Thursday, which served as a reminder of the divergence between the state of the stock market and the current state of the economy.
Around 8:30 am, the do’s and do’s rose about 0.3%.
2. Search for cyclical assets affected by bonds
Yields on US Treasury bills returned to their highest level in a year, and investors were again betting on flexible fiscal and monetary policy, reflecting the US economy this year.
As of 8:30 am, it was 1.31%, a total of 118 basis points above the two-year yield. The spread between the two has not been that large since 2017. Steep yield curves are often associated with periods of robust growth, and the current setup matches forecasts of reaching 5% this year.
The likelihood of the policy remaining relaxed throughout the year was driven by data from, which showed the degree of slack in the labor market. Initial complaints rose to 861,000 last week.
The US data calendar is fluid on Friday, with only existing home sales and a noteworthy speech from Boston Fed Chairman Eric Rosengren.
CHECK: Complete Investing.com Economic Calendar
3. The pound and the Australian dollar hit new highs, despite weaker retail sales
The same factors that drove higher returns also pushed it lower in currency markets – it hit the highest level in more than a year against the dollar, while hitting $ 1.40 for the first time in three.
Both currencies had to ignore the weaker-than-expected retail sales reports intermittently.
However, cryptocurrencies seemed to be the preferred option for those betting on the devaluation of the dollar: it reached $ 53,000 for the first time, while staying just below the all-time high of $ 1,944.
4. The PMI surprises in two directions
Divergence was the name of the game in European economies again in January. They showed that it expanded at the fastest rate since early 2018, with an index increasing from 54.8 to 57.7. Analysts had expected a drop to 54.3.
However, services were a mirror image, as obstacles once again devastated the retail and tourism sectors. That of the region went from 45.4 to 44.7, disappointing hopes of a modest recovery.
Things are looking better in the UK, where both manufacturing and services have exceeded expectations. The United States for January leaves at 10:45, but tends to be overshadowed by the report, due out next week.
5. Oil drops as cold decreases
Oil prices fell again as production in Texas began to resume after the deadly cold snap earlier in the week. The US government also extended a conversation to Iran about returning to the UN-sponsored deal that it abandoned in 2017.
Futures fell 1.7% to $ 59.49 a barrel, while they fell 1.2% to $ 63.16 a barrel.
Texas refineries, which typically handle millions of barrels of oil a day, will take longer to return to normal service, a factor that is likely to keep premiums on refined products in the short term.
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