Preliminary count in the US favors Democrats and Selic is on the agenda today

Two events capture the attention of those who invest in interest rates, the dollar and the stock market this Wednesday. In the United States, the preliminary count of the midterm legislative elections (midterms), with data from November 4, indicates victory for the Democratic Party in the House and Senate, according to Money Times. In Brazil, the Selic rate, currently at 13.75% per year, has its fate decided today by Copom, the BC body responsible for interest policy.

The market consensus favors the pause. According to Money Times, 21 houses were consulted: 16 believe that the rate will remain at 13.75%, while five predict a cut of 0.25 p.p., which would take the Selic to 13.50%. Among those expecting the fall are ASA, Inter, Bradesco, XP and BB Investimentos. InfoMoney's reading is that the market has almost no doubt that the monetary authority will leave the rate unchanged.

The majority of those consulted expect Selic to be at 13.75% until the end of 2026. Projections for December, however, differ even among those who foresee a pause, reports Money Times. For investors consulted by InfoMoney, what should most affect national assets is the way the BC writes the statement.

In the USA, Your Money resembles the term 'lame duck', used for politicians at the end of their term. The expression emerged in 18th century England to designate bankrupt investors. The same vehicle summarizes the day's agenda with American elections, Copom and Itaú's balance sheet.

The economic agenda also includes the ADP jobs report, released today, and the American payroll, scheduled for Friday (6), according to Money Times. In the stock market, investors remain attentive to the earnings season.

The domestic backdrop combines fiscal uncertainty and above-target inflation, according to InfoMoney. In this scenario, André Lara Resende's ideas for alleviating the permanent burden of public debt come into debate, which remain under discussion, according to the same publication. For those who defend fiscal responsibility, the burden of debt is the central point of this conversation.

Practical impact for those applying

For those who operate interest rates and the dollar, the immediate reading is that the Copom's decision is already, to a large extent, priced as maintenance. In this scenario, the market's greatest sensitivity to Brazilian assets should be based on what comes out of the Central Bank's document, according to the investors interviewed by InfoMoney. On the American side, the result of the midterms is still preliminary, which keeps the final composition of Congress open and leaves room for revisions in the coming hours. This article is not a recommendation to buy or sell assets nor does it predict price movements.

Automatically translated from Portuguese.