Ibovespa Se Pergunta: Ampliar Sequência Negativa com Dados de Inflação e Questões Fiscais no Radar

The Brazilian stock market, Ibovespa, is expected to extend its losing streak to a seventh session, influenced by external and domestic factors, including US inflation data and domestic fiscal issues. As of 12pm, the Ibovespa had lost 0.3% to 134,888.67 points, with a morning report showing a US CPI increase, keeping Federal Reserve rate cut expectations in September. Domestic concerns include an Executive-Legislative hearing on IOF and business meetings with the government over US tariffs on Brazilian products. The Banco Central postponed a dollar sale due to technical issues.

The Brazilian stock market, Ibovespa, is expected to extend its losing streak to a seventh session, influenced by external and domestic factors, including U.S. inflation data and domestic fiscal issues. As of 12pm, the Ibovespa had lost 0.3% to 134,888.67 points, with a morning report showing a U.S. CPI increase, keeping Federal Reserve rate cut expectations in September. Domestic concerns include an Executive-Legislative hearing on IOF and business meetings with the government over U.S. tariffs on Brazilian products. The Banco Central postponed a dollar sale due to technical issues.

In the wake of President Trump's threat of a 50% tariff on Brazilian imports, the Brazilian stock market has shown signs of resilience. According to Rodrigo Santoro, head of equities at Bradesco Asset Management, the more restrained performance of domestic assets was driven by the expectation that Trump may not go through with the 50% tariff, and Wednesday’s futures markets had already priced in some of the potential negative impact [1]. The spot dollar closed up 0.72% at R$5.5426, while the Ibovespa closed down just 0.54% at 136,743 points. Future interest rates rose across the curve, with the January 2026 DI contract rate increasing from 14.92% to 14.935% [1].

Luciano Telo, chief investment officer for Brazil at UBS Wealth Management, highlighted the uncertainty over whether the tariffs will actually be implemented on August 1. He noted that the muted asset reaction reflects a global trend toward a weaker dollar and Brazil’s high carry, which is currently supporting the real [1]. Even if Brazil faces the highest tariffs, foreign investors may not view the country negatively, as Trump has been aggressive with other regions as well [1].

Domestic concerns, such as the Executive-Legislative hearing on IOF and business meetings with the government over U.S. tariffs, have added to the market's volatility. The Banco Central's postponement of a dollar sale due to technical issues has also contributed to the market's uncertainty. However, the structural investment thesis for Brazilian equities has not changed, and global investors allocating to Brazilian stocks are not overly focused on the tariff hike [1].

The Ibovespa could face a couple of months of weaker performance, but the broader trend is expected to remain positive. As investors rotate out of domestic stocks and those potentially affected by Trump’s tariffs toward exporters, Embraer posted the worst performance in the index, falling 3.70% [1]. Other companies with notable exposure to the new tariffs include Suzano, WEG, CBA, Alpargatas, Minerva, Jalles, and Tupy [1].

The U.S. threat of a 50% tariff on Brazilian imports is the latest example of Trump using tariffs as a cudgel for political priorities outside of trade. Trump cited the trial of former Brazilian President Jair Bolsonaro as the rationale for the new tariffs, which are set to take effect on August 1 [2]. This move has shaken the global trade order established in the 1940s, when market economies sought to put tariffs and trade among them on a stable footing [2]. Although often controversial and sometimes volatile, such as when the Smoot-Hawley Act hiked U.S. tariffs in 1930, tariffs have generally been motivated by economic or domestic political goals [2].

References:
[1] https://valorinternational.globo.com/markets/news/2025/07/11/brazil-assets-moderate-swings-after-new-tariffs.ghtml
[2] https://www.comerica.com/insights/economic-insights/fx-commentary/general-commentary/fx-commentary-july-11-2025.html