-1.38%
SP500 TRN (R$)
-0.27%
BTC BRL
-0.68%
Gold (GOLD11)
-1.13%
Commercial Dollar
5,151
Ref date 05/22/2024
UNANCHORING LOCAL EXPECTATIONS FURTHER
Good morning guys.
The minutes of the last Federal Reserve meeting were considered hawkish (contractionary), although much of this approach was already anticipated by the market. The main message was clear: if inflation got out of control again, the Fed would raise rates. However, the probability of this scenario is low. Unfortunately, the market reacted by selling first and analyzing later. To me, the minutes seemed outdated, as the meeting took place before the release of relevant data in recent days. The market's bad mood yesterday can be reversed today with the digestion of Nvidia's good results. American futures are rising, as are European markets, although Asian markets have not followed the optimism.
Sentiment in Asian markets has been hurt by the possibility of a new trade war between the US and China following Chinese retaliation to higher tariffs imposed by the US on key business sectors. Furthermore, Chinese military exercises near Taiwan scared investors, along with the digestion of the Fed's minutes. On the agenda, we have the meeting of G7 finance ministers and some activity data in Europe, which is beginning to consider a cycle of easing of monetary policy. I wouldn't be surprised to see interest cuts in the Eurozone and the United Kingdom as early as June. In Brazil, the continued unmooring of economic expectations is becoming a growing concern.
