After domestic assets supported continued gains in yesterday’s trading, market participants should continue to monitor local issues in a day packed with indicators and events that will help adjust agents’ bets on the direction of monetary policy. In this trade, while outward appearance points to a positive day for variable income, it also points to dollar strength, while US Treasury yields point to a decline from the holiday.
The first event on Wednesday, this morning’s announcement of the Genial/Quest study, may not have any more decisive impact on the dynamics of domestic assets. In recent days, the market has already predicted a certain loss in the government’s popularity through surveys commissioned by financial institutions, which have already shown that President Luiz Inacio Lula da Silva’s (PT) upward trend in approval ratings has been interrupted. Therefore, the research released today only confirms market expectations.
Therefore, investors should pay particular attention to economic activity statistics and statements from central bank directors. Attention will be focused on the amount of services provided in September (9am), followed by a press conference (10am) with BC Chairman Gabriel Garipolo and Directors Ayrton Aquino and Diogo Guillén, followed by Garipolo’s participation in a Bradesco Asset event in the afternoon. Clues about when the monetary authorities will start cutting rates should guide the market, which could cause some volatility on the short-term side of the interest rate curve.
With the return of the Veterans Day holiday, exteriors will also be important. Although the market is only monitoring the vote in the US House of Representatives to end the “shutdown,” the definitive end to the federal public sector shutdown is already visible in asset prices. Against this backdrop, while agencies are still monitoring the debate over the artificial intelligence (AI) bubble, the morning was positive for New York futures after AMD raised its outlook for the next few years above Wall Street expectations. Nasdaq futures rose 0.58%.
Additionally, yesterday’s weak performance in labor market data surprised investors, leading to a decline in long-term US Treasury yields of about 3 basis points (bp). The U.S. may have lost 50,000 jobs in October, according to Goldman Sachs, which could prompt calls for further interest rate cuts later this year. Therefore, you should carefully follow the speeches of Federal Reserve officials.
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