Brazil’s Ibovespa climbed 7.70% to 206,911.89 in the settled session before Latin American markets opened Tuesday. Brent crude held near US$101 a barrel, supporting producer revenues while raising costs for consumers.
Producer Revenues, Consumer Costs
The report said oil prices supported companies such as Petrobras and Ecopetrol, along with the fiscal positions of Brazil, Mexico and Colombia. But the same rise lifted fuel costs for consumers and complicated inflation policy in Brazil and Mexico. Producer revenues gained as consumers faced higher expenses.
Petrobras preferred shares, PETR4, rose 8.19%, with R$6,798 million, or about US$1.4 billion, traded. Itaú preferred shares, ITUB4, recorded R$5,210 million in turnover; Vale, VALE3, recorded R$5,084 million; BTG Pactual units, BPAC11, R$5,009 million; and exchange operator B3SA3, R$4,662 million. The report said oil and the stronger real helped Petrobras. Itaú and Vale ranked next by turnover.
The Ibovespa logged five straight positive sessions in the settled data. Its gain exceeded 7%, dwarfing Wall Street’s moves. The live board showed 80% market breadth: four of five names advanced, while one declined. Its listed 12-month gain for the Ibovespa was 21.85%.
Foreign Flows and Currency Risks
Foreign investment flows and carry trades, the report said, strengthened regional currencies. It linked the Brazilian real’s strength to foreign investors seeking the gap between Brazil’s Selic benchmark rate and U.S. rates. A stronger real can lift the local-currency value of exporters’ dollar revenues, the report said, but it can also squeeze their competitiveness.
In the market-close table for 5 October, USD/BRL stood at 4.9936, down 4.21%. The live currency board later listed USD/BRL at 5.16, up 0.01%. The report called the real’s move toward 5.00 per dollar the morning’s standout currency signal. A firm U.S. dollar index remained part of the picture.
Regional stock indexes mostly rose in the settled data. Argentina’s MERVAL gained 3.68% to 2,869,488; Colombia’s COLCAP rose 2.69% to 2,582.65; Chile’s IPSA added 1.91% to 11,124.65; and Peru’s BVL S&P Perú advanced 0.60% to 59,860.04. Mexico’s figures differed across sections of the report: one listed the IPC at 64,327.79, down 0.32%, while another said it closed Monday at 64,975, up 0.69%.
Public Accounts and the Data Ahead
Mexico’s finance ministry, SHCP, reported a budget deficit of MXN 739 billion, about US$41 billion, for January to August. That figure came in MXN 276 billion, about US$15 billion, below plan. Mexico’s gross fixed investment rose 1.4% month on month in July, matching the forecast.
Brazil’s Services PMI fell to 49.2 in September from 50.5, while its Composite PMI dropped to 47.4 from 49.1. Both readings fell below the 50 threshold. The report said firms held back before the election. Brazil’s trade balance was due at 15:00 BRT on Tuesday; the wholesale inflation gauge IGP-DI was scheduled for Wednesday.
Mexico’s September consumer confidence survey and Colombia’s September producer prices were also scheduled. Traders watched for the Federal Open Market Committee minutes due Wednesday. The report said a dovish signal could lift regional leaders, while a hawkish surprise could test the real and peso. It provided no wage figures, worker accounts, union statements or labor response to the market moves.