FX.co ★ Ibovespa Slips After Selic Hike

The Ibovespa index declined by approximately 0.6% on Friday, falling below the 138,000 mark as investors resumed trading following holidays in both Brazil and the United States. This downward movement came in response to the central bank’s recent decision to increase the Selic interest rate to 15%, and amidst ongoing geopolitical tensions in the Middle East. Earlier in the week, the central bank raised the benchmark interest rate by 0.25 percentage points and suggested that this might be the last in the current cycle of rate hikes, indicating that the rate is likely to remain unchanged for an extended duration. This decision took investors by surprise, as many had anticipated that the rate would remain stable. Concurrently, oil prices paused in their upward trend after U.S. President Trump postponed a decision regarding potential military action in the escalating conflict between Israel and Iran. On the corporate landscape, shares of Vale saw a modest dip of 0.2%, while the banking sector also experienced declines, including Banco do Brasil (-0.4%), Itaú (-0.9%), Santander (-0.9%), and Bradesco (-0.9%). Eletrobras shares were down by 0.7%. In contrast, Embraer saw a positive uptick of 0.7% after securing an order from SkyWest Airlines, the largest operator of E-Jets globally, for 60 jets with options for an additional 50.