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An optimistic bias dominates the fiscal framework and Powell’s investors

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Mercado is betting on a solid and enforceable fiscal framework set by Finance Minister Fernando Haddad a few weeks ago, although there is no definition of a new rule. Yesterday, Planning Minister Simon Tebbet reinforced Hadad’s commitment that the new fiscal anchor will be presented to the public in March, after discussions between the ministries of planning, industry, budget and finance are completed and presented to President Lula.

As a result, future interest rates have accumulated declines in recent days. This week, intermediate maturities have accumulated a retreat of more than 40 basis points through Wednesday, while those with longer maturities have reached a decline of almost 30 basis points. Selic price movement opportunities starting in May and ending this year at 12.35% per annum.

In addition to the positive moment for national assets, investors are still digesting the Fed (Federal Reserve) Chairman’s speeches during the week, which indicate longer interest rates, but seem to prefer to focus on Jerome Powell’s comments yesterday; growth rates have not yet been specified.

In this scenario, the stock markets of Brazil and the USA showed a strong recovery yesterday. Friday, however, has a chance to change the scenario with the release of the IPCA (Expanded Consumer Price Index) here and the employment (wages) report in the US.

So far, the price of goods seems to be helping the optimism here. Iron ore traded above US$127 a tonne again this morning in Singapore. And oil is operating at a slightly higher level (0.04%) this morning at USD 82.69 per barrel of Brent.

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