Copom arrives at Selic with inflation under pressure and public accounts under distrust
First meeting after the elections, with Selic at 13.75%, leaves the market attentive to the statement and the government's signals about the fiscal.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM INFOMONEY · 3 MIN
The Central Bank's Monetary Policy Committee, Copom, meets this week to decide the Selic, currently at 13.75%. It is the first meeting after the elections, and the decision takes place with inflation under pressure and with market distrust over public accounts, according to InfoMoney. Fiscal distrust falls on the government of President Lula, who was re-elected.
Before the vote, the expectation was for a cut of 0.25 percentage points. After that, the majority of the market began to project Selic maintenance until the end of 2026, and XP expects a break until the end of 2027, reports InfoMoney. Money Times states that the pause in cuts is already considered certain by the market.
In the exchange rate, Seu Dinheiro records that the dollar soared after Lula's election. For economist Luis Otavio Leal, the BC should stop the cuts at this week's Copom, and a cut in December depends on government signals about public accounts.
The background is fiscal. According to InfoMoney, inflation is above target and there is discussion about a proposal by André Lara Resende to reduce the cost of public debt. In Leal's assessment, a possible cut in December will depend on these signs.
Abroad, the mid-term elections in the United States, with preliminary counting on November 4, gave victory to the Democrats in the House and Senate, a setback for Trump, according to Money Times. The data agenda also weighs in: the ADP jobs report comes out today, and the US payroll on Friday (6).
For those who invest, the central point is the Copom statement, which InfoMoney points out as the main trigger for Brazilian assets this week.
What changes for the investor
If the Copom maintains the Selic and signals a pause, the basic interest rate tends to remain high for longer, which tends to weigh on companies more dependent on credit and on Brazil's risk reading. If the statement does not reduce fiscal distrust, the dollar may remain sensitive to news coming from Brasília. Abroad, Friday's payroll and the results of the midterms could affect American interest rates and technology stocks listed on the Nasdaq.
Automatically translated from Portuguese.
