FX.co ★ Ibovespa Slips amid US Shutdown and Tax Reform Debate

On Wednesday, the Ibovespa index dipped below the 146,500 mark, as investors assessed the implications of the impending US government shutdown alongside developments in Brazil’s income tax reform. In the United States, concerns over the shutdown are mounting due to potential delays in critical economic data and uncertainties regarding the Federal Reserve's policy direction. Domestically, attention was focused on the legislative vote aiming to increase the income tax exemption threshold, amidst ongoing fiscal discussions. Economically, there was an alarming drop in Brazil's Manufacturing PMI to 46.5, marking the steepest decline in over two years. As for individual stocks, the banking sector saw a mixed performance. While major banks like Bradesco and Itaú experienced modest gains, rising 0.5% and 0.1% respectively, Banco do Brasil saw a 0.2% decline, following an Itaú BBA report indicating an increase in agribusiness loan delinquencies for August. Meanwhile, Petrobras recorded a 0.2% decrease as oil prices continued to fall, driven by expectations of an expanded OPEC+ production and subdued demand signals from the US and Asia. Conversely, Vale's shares rose by 1.5% after China's centralized iron ore purchaser ordered mills to temporarily cease BHP imports, thereby increasing demand for their competitors.