Ibovespa falls to 183.8k points after US payroll report disappoints expectations
The Ibovespa index closed lower on Friday at 183,800 points following weaker-than-anticipated US employment data and shifts in Federal Reserve rate hike expectations.
Brazil's Ibovespa index operated at a low level on Friday, closing at 183,800 points. Investors reacted to the latest US employment report which showed 162,000 jobs were created in August. This figure was significantly lower than the 56,000 job creations predicted by economists consulted by Reuters. As a result, shares of Vale, Petrobras, and most major banks declined. The commercial dollar rose to R$ 5.13 while future interest rates traded mixed.
The labor report was released a day after Federal Reserve director Christopher Waller moderated expectations for an interest rate increase. Prior to his comments, the probability of a rate hike stood at 63% according to the CME FedWatch tool. Afterward, operators expected an 58% probability of such an increase.
Domestically, election scenarios and the Supreme Court crisis dominated the narrative. A Datafolha survey indicated that President Luiz Inácio Lula da Silva's numerical advantage over Senator Flávio Bolsonaro diminished. On the international stage, the Dow Jones Future fell 0.26%, the S&P Future receded 0.25%, and the Nasdaq Future gained 0.05%. Supreme Court President Edson Fachin demanded explanations within five days after Chief Judge Alexandre de Moraes accused Andre Mendonça.
