FX.co ★ Ibovespa Resilient Amid Tightening Expectations

The Ibovespa index nudged up by 0.2% on Thursday, surpassing the 132,600 mark to attain the highest levels since October 2024. This development came as investors evaluated the latest insights from the Central Bank's Monetary Policy Report, which revealed a downward revision of the 2025 GDP growth forecast to 1.9%. The report stressed the necessity for ongoing robust interest rate hikes in light of inflation expectations that remain stubbornly above the targeted levels. The annual mid-month inflation figure for Brazil was slightly below forecasts at 5.26%. However, the sustained high levels of inflation in services indicate that further monetary tightening may be necessary before any reductions in rates could be contemplated. In parallel, uncertainty looms over U.S. trade policies as former President Trump's 25% tariffs on auto imports continue to provoke concerns about escalating global trade tensions. On the domestic front, companies like Banco do Brasil, Companhia Sanea, Bradesco, and BRF bolstered the index with gains ranging from 1% to 1.7%. Conversely, Ambev, JBS, and Eletrobras underperformed, experiencing declines of 0.7% to 1.3%.