FX.co ★ Ibovespa Weighed by Hawkish BCB Expectations

On Monday, the Ibovespa index declined by 0.4% to settle at 136,551, as investors dealt with concerns over the potential continuation of high interest rates and persistent fiscal uncertainties. Domestically, the Copom's decision to maintain the Selic rate at 15%, along with indications of further tightening, negatively impacted banking and consumer finance stocks. Banco do Brasil, Bradesco, and Santander each experienced a drop of over 1%. Additionally, the retail and real estate sectors were under pressure due to apprehensions that higher borrowing costs could suppress household spending and hinder new construction activities. On the international front, a significant 7% decrease in oil prices, following Iran’s restrained response to US bases in Qatar, resulted in a 2.8% decline for the energy giant Petrobras, removing a key earnings driver and contributing to the market's cautious sentiment.