FX.co ★ Ibovespa Slips on GDP Data and Bolsonaro Trial

The Ibovespa index declined approximately 1%, dipping below the 140,000 mark on Tuesday. This movement came as investors weighed Brazil's second-quarter GDP results alongside the commencement of the conclusive phase of former President Jair Bolsonaro's coup trial at the Supreme Federal Court. The GDP expanded by 2.2% compared to the previous year, marking the slowest growth since the first quarter of 2022—a reflection of the sustained period of elevated interest rates implemented by the Central Bank of Brazil. This development has cast doubt over the potential initiation of interest rate reductions, despite a robust labor market report and persisting high inflation. The financial sector suffered significant losses, with Banco do Brasil, Bradesco, and Itausa experiencing declines ranging from 4% to 2.5%, as the slowing growth dampened the forecast for credit demand.