FX.co ★ Ibovespa Surges to Historic High

The Ibovespa index surged by 1.8% to conclude near a new record high of 181,919 on Tuesday. This rise was supported by a significant drop in the US dollar and strong anticipation that the Central Bank will maintain the Selic rate at 15% in its upcoming decision on Wednesday. The IPCA-15 inflation rate for January slowed to 0.20%, stabilizing short-term policy expectations despite persistent high prices in the services sector. This environment of lower yields across the local yield curve enhanced investor interest in banking and cyclical stocks. Banco Do Brasil saw a 1.5% increase, Itaúsa climbed 2.9%, Santander rose 3.6%, Bradesco advanced 2.6%, and B3 also improved by 2.6%. Petrobras rose by 3% in line with stronger oil prices, while Vale gained 2.6% despite a decline in iron ore prices, taking advantage of a more favorable risk setting. Moreover, stocks sensitive to interest rates and those tied to the domestic market outperformed. Localiza jumped 4.4%, Cyrela leaped 6.6%, and the utilities sector saw broad gains, reflecting expectations that tight monetary policy will persist as the disinflation process continues slowly.