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Brazil’s Financial Morning Call for July 4, 2025

1 week ago 4

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Brazil’s financial markets face a dynamic session today, shaped by a focused domestic economic calendar and global indicators influencing commodity demand, currency stability, and investor sentiment.

The Central Bank of Brazil (BCB) maintains the Selic rate at 15% to address inflation at 5.53%, well above the 3% target, supporting the Brazilian real via carry trade but pressuring retail and construction sectors.

A projected 2025 fiscal deficit of R$104 billion and a 76.1% debt-to-GDP ratio amplify market sensitivity, while GDP growth is expected to slow to 2.3% from 3.4% in 2024 due to high rates and U.S. trade tensions.

Brazil’s service sector faces its third consecutive month of decline, adding pressure on economic momentum.

Today’s Key Domestic Events:

Brazilian PPI (MoM) (08:00 AM BRT): Tracks producer price changes, offering insights into inflationary pressures within manufacturing. A higher-than-expected reading could signal rising costs, impacting monetary policy expectations.
Trade Balance (Jun) (02:00 PM BRT): Measures Brazil’s export-import dynamics, critical for assessing commodity-driven revenue and currency strength. A robust surplus could bolster the real and investor confidence.

These events are pivotal as the Ibovespa consolidates near record highs, the real remains resilient, and commodities navigate global supply and demand shifts.

Brazil’s Financial Morning Call for July 4, 2025

Globally, Eurozone indicators like German Factory Orders, French Industrial Production, and ECB President Lagarde’s speeches will influence commodity export demand.

The U.S. markets are closed for Independence Day, limiting direct impact but leaving prior data—like strong U.S. job figures—to guide sentiment.

Economic Agenda

Brazil

07:00 AM EST / 08:00 AM BRT – Brazilian PPI (MoM) (May): Actual TBD, consensus TBD, previous -0.36%. Tracks producer price inflation, signaling cost pressures in manufacturing.
01:00 PM EST / 02:00 PM BRT – Trade Balance (Jun): Actual TBD, consensus 6.45B, previous 7.24B. Reflects export-import balance, critical for commodity-driven revenue.

North America

United States – Markets Closed for Independence Day: No major economic releases scheduled, but prior data (e.g., 147,000 jobs added in June, unemployment at 4.1%) will influence sentiment. [https://www.riotimesonline.com/ibovespa-sets-new-record-as-commodities-and-wall-street-drive-gains/]
Canada, 06:00 AM EST / 07:00 AM BRT – Leading Index (MoM) (Jun): Actual TBD, consensus TBD, previous 0.10%. Signals economic trends, impacting Brazilian export demand.
Canada, 08:15 AM EST / 09:15 AM BRT – Reserve Assets Total (Jun): Actual TBD, consensus TBD, previous 125.0B. Reflects financial stability, influencing trade flows.
Mexico, 07:00 AM EST / 08:00 AM BRT – Consumer Confidence (Jun): Actual TBD, consensus TBD, previous 46.7. Gauges consumer spending, affecting regional demand.
Mexico, 07:00 AM EST / 08:00 AM BRT – Consumer Confidence n.s.a. (Jun): Actual TBD, consensus TBD, previous 46.5. Provides unadjusted consumer sentiment, impacting trade.

Eurozone (Key and Second-Tier Events)

02:00 AM EST / 03:00 AM BRT – German Factory Orders (MoM) (May): Actual -1.4%, consensus -0.2%, previous 1.6%. Signals industrial demand, critical for commodity exports.
02:45 AM EST / 03:45 AM BRT – French Industrial Production (MoM) (May): Actual -0.5%, consensus 0.4%, previous -1.4%. Reflects manufacturing health, influencing trade.
03:00 AM EST / 04:00 AM BRT – Spanish Industrial Production (YoY) (May): Actual 1.7%, consensus TBD, previous 0.6%. Tracks industrial growth, impacting export demand.
03:50 AM EST / 04:50 AM BRT – Italian IHS S&P Global Construction PMI (Jun): Actual TBD, consensus TBD, previous 50.5. Measures construction activity, affecting metal demand.
03:50 AM EST / 04:50 AM BRT – German IHS S&P Global Construction PMI (Jun): Actual TBD, consensus TBD, previous 44.4. Signals construction trends, influencing commodities.
03:50 AM EST / 04:50 AM BRT – French IHS S&P Global Construction PMI (Jun): Actual TBD, consensus TBD, previous 43.1. Reflects construction health, impacting trade.
03:50 AM EST / 04:50 AM BRT – IHS S&P Global Construction PMI (Jun): Actual TBD, consensus TBD, previous 45.6. Tracks Eurozone construction, affecting commodity demand.
03:50 AM EST / 04:50 AM BRT – ECB President Lagarde Speaks: Provides policy insights, influencing currency and commodity markets.
03:50 AM EST / 04:50 AM BRT – ECB’s Elderson Speaks: Offers monetary policy perspectives, impacting investor sentiment.
05:00 AM EST / 06:00 AM BRT – PPI (YoY) (May): Actual TBD, consensus 0.3%, previous 0.7%. Measures producer price inflation, signaling cost trends.
05:00 AM EST / 06:00 AM BRT – PPI (MoM) (May): Actual TBD, consensus -0.6%, previous -2.2%. Tracks monthly price changes, influencing commodity prices.
06:00 AM EST / 07:00 AM BRT – Spanish Consumer Confidence (May): Actual TBD, consensus TBD, previous 76.5. Gauges consumer spending, affecting export demand.
01:00 PM EST / 02:00 PM BRT – ECB President Lagarde Speaks: Further policy comments, critical for market direction.

Other Regions

01:00 AM EST / 02:00 AM BRT – Singapore Retail Sales (YoY) (May): Actual 1.4%, consensus TBD, previous 0.2%. Reflects consumer demand, impacting global trade.
01:00 AM EST / 02:00 AM BRT – Singapore Retail Sales (MoM) (May): Actual 1.0%, consensus TBD, previous 0.0%. Tracks monthly retail trends, influencing sentiment.
01:45 AM EST / 02:45 AM BRT – Swiss Unemployment Rate n.s.a. (Jun): Actual 2.7%, consensus TBD, previous 2.7%. Signals labor market stability, affecting trade.
01:45 AM EST / 02:45 AM BRT – Swiss Unemployment Rate s.a. (Jun): Actual 2.9%, consensus 2.9%, previous 2.8%. Reflects adjusted labor conditions, impacting sentiment.
04:30 AM EST / 05:30 AM BRT – UK Construction PMI (Jun): Actual TBD, consensus 48.6, previous 47.9. Measures construction activity, influencing metal demand.
05:30 AM EST / 06:30 AM BRT – Hong Kong Foreign Reserves (USD) (Jun): Actual TBD, consensus TBD, previous 431.00B. Reflects financial stability, impacting trade flows.
07:30 AM EST / 08:30 AM BRT – India Bank Loan Growth: Actual TBD, consensus TBD, previous 9.6%. Signals credit demand, affecting emerging market sentiment.
07:30 AM EST / 08:30 AM BRT – India Deposit Growth: Actual TBD, consensus TBD, previous 10.4%. Reflects banking health, influencing investment flows.
07:30 AM EST / 08:30 AM BRT – India FX Reserves, USD: Actual TBD, consensus TBD, previous 697.94B. Gauges reserve strength, impacting currency stability.

Brazil’s Markets Yesterday

Brazil’s B3 closed higher on July 3, 2025, with the Ibovespa index surging 1.35% to 140,927.86 points, a new all-time high, reaching an intraday peak of 141,303.55 points.

Strong external factors, including Wall Street’s record highs and a surge in metal commodity prices, particularly iron ore, drove the rally.

The U.S. labor market report, showing 147,000 jobs added in June and unemployment falling to 4.1%, eased concerns about a U.S. economic slowdown, boosting global risk appetite.

Chinese iron ore futures rose 2.45%, benefiting Brazilian exporters like Vale, though profit-taking tempered gains late in the session.

U.S. Markets Yesterday

U.S. stocks extended gains on July 3, 2025. The S&P 500 rose 0.8% to 6,279.35, the Dow Jones Industrial Average climbed 0.8% to 44,828.53, the Nasdaq composite advanced 1% to 20,601.10, and the Russell 2000 gained 1% to 2,249.04.

Strong U.S. labor data and positive global sentiment supported the rally, with investors shrugging off concerns about Federal Reserve rate cut delays.

Brazilian Real

The Brazilian real strengthened on July 3, 2025, with USD/BRL closing at 5.4202, down 0.75%, marking an 11-month low.

Strong foreign inflows, with $5 billion invested in B3 since early 2023, and commodity price gains supported the currency, despite fiscal tensions over IOF tax disputes. Today’s Brazilian PPI and Trade Balance, alongside Eurozone industrial data, will guide currency stability.

Oil Prices

Oil prices held steady on July 3, 2025, with Brent crude at $74.30 per barrel, supported by Middle East tensions and U.S. inventory drawdowns.

Petrobras benefits from Brazil’s record oil production and a $5-billion investment to boost diesel and jet fuel output in Rio. Today’s Eurozone industrial production data will signal demand trends.

Gold Prices

Gold held firm on July 3, 2025, at $3,380 per troy ounce, driven by safe-haven demand amid U.S. policy uncertainty and technical signals. This supports Brazil’s mining sector, including Vale. Today’s ECB speeches and Eurozone PPI will influence safe-haven flows.

Silver Prices

Silver remained firm on July 3, 2025, at $36.20 per ounce, fueled by industrial demand and technical strength. This bolsters Brazil’s mining exports. Today’s Eurozone industrial production and construction PMIs will guide metal demand.

Copper Prices

Copper slid on July 3, 2025, to $5.15 per pound as traders took profits and the U.S. dollar firmed. Despite the dip, tight supply benefits Vale, though Brazil’s steel sector faces import pressures. Today’s German Factory Orders and Spanish Industrial Production will clarify demand.

Cryptocurrencies

Bitcoin held above $109,000 on July 3, 2025, supported by ETF inflows despite a 2.5% drop, bolstering Brazil’s fintech sector, including Mercado Livre and XP Inc. Today’s Eurozone PPI and ECB speeches will influence risk appetite.

Iron Ore Prices

Iron ore slipped to $96 per ton on July 3, 2025, on the SGX TSI Iron Ore CFR China (62% Fe Fines) Index, facing supply pressure despite earlier gains. This impacts Vale, though technical momentum persists. Today’s Eurozone construction PMIs will signal demand trends.

Industry Outlook

Brazil’s agribusiness and mining sectors face challenges from the 15% Selic rate and U.S. tariffs, with 63% of firms reporting adverse impacts.

Inflation at 5.53% and a 76.1% debt-to-GDP ratio limit growth, but foreign investor inflows of $5 billion into B3 since 2023 signal confidence. The service sector’s third straight month of decline adds pressure, though cars and motorcycles drive growth in vehicle sales.

Brazil’s M&A market in 2025 focuses on big deals with fewer transactions, reflecting cautious optimism. Today’s Brazilian PPI, Trade Balance, and Eurozone industrial data will shape export and currency dynamics.

Company Updates

Petrobras’ Investment Drive: Petrobras launched a $5-billion initiative on July 3, 2025, to boost diesel and jet fuel production in Rio, supporting Brazil’s energy sector. However, it lost its dividend king status due to payout adjustments. Today’s Eurozone industrial data will influence energy demand sentiment.

Eletromidia’s Privatization: Globo took Eletromidia private on July 3, 2025, reshaping Brazil’s outdoor advertising market. Today’s Brazilian PPI will guide advertising sector sentiment.

Oi’s Debt Crisis: Oi faces a critical debt crisis, struggling to stay afloat in Brazil’s telecom sector. Today’s Trade Balance will influence investor confidence in telecom financing.

M&A Market Shift: Brazil’s M&A market in 2025 focuses on big deals with fewer transactions, reflecting cautious optimism. Today’s Eurozone PPI will shape corporate investment sentiment.

Explanation of EST

Eastern Standard Time (EST) is the time zone used in the eastern United States, including New York, Washington, D.C., and Miami, set at UTC-5, five hours behind Coordinated Universal Time (UTC).

EST is applied here for consistency, as requested, and is the standard for U.S. financial markets, influencing global trading schedules.

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