FX.co ★ Ibovespa Rises Amid IOF Tax Dispute and US Trade Tensions

On Tuesday, the Ibovespa index ticked upwards, surpassing the 135,500 mark as attention turned to the Brazilian government's initiative to increase taxes on financial transactions. Brazil's Supreme Court facilitated a reconciliation meeting between the executive and legislative branches following Congress's move to overturn President Lula's decree, which is now being backed by the Attorney General's Office. Simultaneously, market participants kept a close eye on Brazil's strategy to counter a US threat of 50% tariffs on Brazilian imports, with Vice President Alckmin spearheading talks with the impacted sectors. Earlier in the day, the Brazilian government issued a decree concerning the Economic Reciprocity Law, allowing for potential retaliation against US trade actions. Globally, investors absorbed US inflation figures indicating an annual increase to 2.7% in June—the highest rate since February and meeting expectations. Investor sentiment was cautious following the announcement of new 30% tariffs imposed by Trump on the EU and Mexico. In Brazil, the market saw specific movements: shares of Petrobras (-1.3%), Vale (-1.1%), CSN (-0.8%), and Embraer (-0.9%) witnessed declines, while Gerdau experienced a 1.3% rise, buoyed by robust operations in the US.