Copom decides on Selic on Wednesday and US employment report enters the week's radar
With the Selic at 13.75% per year, the projection points to another cut of 0.25 percentage points, while the American payroll arrives on Friday.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM TIMES BRASIL · 2 MIN
The Brazilian market opens the week without trading, as Monday, November 2nd, is the All Souls' Day holiday and there is no trading. The focus is on Wednesday, November 4th, when Copom announces the decision on Selic. According to Seu Dinheiro and Money Times, the announcement is scheduled for 6:30 pm.
The base rate is at 13.75% per year, after the last cut, made at the September meeting, according to Times Brasil. The Economic Analysis of the same vehicle projects another adjustment of 0.25 percentage points, taking the Selic to 13.50% per year. The argument is the slowdown in activity, which would support the continuity of the cycle.
The analysis, however, makes one caveat: inflationary pressures are rising on the horizon. It is in this balance between weaker activity and higher inflation that the statement gains weight. Seu Dinheiro informs that the text should contain Copom’s assessment of inflation, activity and expectations.
For Times Brasil, the statement will be read mainly in search of signs about the continuation of the cycle of cuts. In other words, the investor should pay less attention to the isolated number and more to what the authority signals for the next meetings.
In the external scenario, the week has another test on Friday, November 6, with the release of the US payroll, the employment report, according to Money Times. The Times Brasil headline summarizes the moment as a test of bets on the Fed. Thus, the week has two focuses: the local decision on Wednesday and the American employment data on Friday.
What changes for the investor
With the decision concentrated on Wednesday, reading the statement tends to be the main variable for those who follow interest rates, the dollar and the stock market. A cut in line with the projection reinforces the perception that the cycle continues, but a text that highlights the rise in inflationary pressures could change this reading. Friday's US jobs report adds a second source of uncertainty because it could change the stakes about US policy. The agenda therefore functions as a risk map, and it is worth monitoring both events before drawing any conclusions.
Automatically translated from Portuguese.
