Bloomberg Línea — With markets closed in the United States and Europe because of the Christmas holiday, the attention of Brazilian investors falls on the domestic news on Monday.
In addition to the release of the Focus report, from the Brazilian Central Bank, with economists’ projections for economic indicators such as Gross Domestic Product (GDP), inflation, and Brazil’s interest Selic rate, the announcement of new names of the team of President-elect Luiz Inácio Lula da Silva is on the radar.
In the US, airports across the country are experiencing delays and flight cancellations due to historic blizzards. In China, the Covid-19 situation continues to weigh on expectations of economic recovery.
Check out the news that should move the markets on Monday (26):
1. Ministry
Brazil’s President-elect Lula said last week, when announcing 16 ministers, that he would release this week the names of the 13 remaining leaders for the portfolios of his future government. There are still names missing for the ministries of Environment, Tourism, and Transport, among others.
Last Thursday, Lula announced that the vice president, Geraldo Alckmin (PSB), will also be the Minister of Industry and Commerce. The expectation is that the names of allies such as Simone Tebet (MDB) and Marina Silva (Rede) will be announced this week in strategic positions.
2. Focus Report
The last Focus report, from the Central Bank, for 2022 was released on Monday, signaling higher interest rates for a longer period. Economists now see the Selic rate closing 2023 at 12% per annum, against 11.75% as previously expected.
For 2022, the projections for inflation and Gross Domestic Product (GDP) were reduced: the estimate is a high of 5.64% of IPCA this year, from 5.76% previously. Regarding the performance of the Brazilian activity, the projections point to GDP growth of 3.04%, compared to 3.05% last week.
3. Markets
In a day of empty agenda, the news is also emptier with markets closed in the United States and Europe because of the Christmas holiday.
In Asia, stocks closed with no set direction in a cautious trading environment with low liquidity. The Japanese Nikkei index rose 0.65%, the Hang Seng fell 0.44% in Hong Kong and in China, the Shanghai index closed up 0.65%. In the Asian powerhouse, investors continue to keep an eye on the increase in Covid-19 cases. Since Sunday, the country no longer releases the number of daily infections after criticism.
4. Daily Headlines
Estadão: Brazilian stock exchange should resume IPOs in 2023, but with the market still ‘distrustful
Folha de S. Paulo: Congress reduces disapproval and is better evaluated by Bolsonaro voters
O Globo: With plans to visit ministers, Lula and Dino reinforce articulation with Supreme Court amid the ‘pautas-bombas’ (what is called in Brazil the bill that generates public spending and is contrary to the fiscal adjustment).
Valor Econômico: Better governance guarantees good performance for state-owned companies
5. Agenda
In Brazil, the day’s agenda includes the release of the FGV consumer survey, with the release of the Focus report (8:25 am) and the weekly trade balance (3 pm).
-- With the collaboration of Michelly Teixeira
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