FX.co ★ Ibovespa Extends Record High

The Ibovespa index managed to overturn early losses to end Friday 0.2% higher, reaching a new peak of 141,264. This rise was propelled by a decision from the Supreme Court to halt the enforcement of IOF-tax measures by both the Executive branch and Congress, thereby alleviating a substantial fiscal concern. Additionally, there was a discord between slowing economic activity and central bank forecasts. The Producer Price Index (PPI) for May fell by 1.29%, and industrial production experienced another decline, affected by the restrictive 15% Selic rate. However, market participants remained focused on the central bank's commitment to base interest rate cuts on sustained disinflation rather than temporary economic slowdowns. Leading the gains were major players Ambev, WEG, Eletrobras, and B3, each rising by more than 0.9%, while exporters remained alert to anticipated tariff announcements from Washington on July 9th. The US holiday and clearer political direction regarding the IOF contributed to lighter trading volumes, yet they were sufficient to solidify the benchmark's rise, marking a weekly gain of 3.2%.