With monetary policy at the center of attention in recent days, US inflation numbers may reinforce expectations that the Federal Reserve will announce an interest rate cut next week. The September Consumer Expenditure (PCE) Price Index, the US central bank’s preferred measure, will be released at 12pm (Brasilia time) on Friday. In addition, investors will also be watching consumer confidence data from the University of Michigan at 11 a.m.
Possibility of monetary easing boosts global stocks. Around 8 a.m., the S&P 500 was up 0.17% and the Nasdaq was up 0.37%. In Europe, the Stoxx 600 index rose by 0.25%, and the German DAX index rose by 0.54%. The DXY index, which measures the dollar’s strength against a basket of six currencies from developed countries, settled at 99.011 points.
Although yesterday’s US initial unemployment insurance claims were a bullish surprise, they did not impact a relevant change in interest rate cut bets. According to Fed funds futures compiled by CME Group, the market sees an 87.2% chance of a 0.25 point cut in interest rates at the December meeting.
In Brazil, a slowdown in economic activity, demonstrated by a modest 0.1% increase in GDP in the third quarter, served as a catalyst for lower interest rates going forward. The result gave the market more confidence to price in the start of a cycle of cuts by the central bank in January.
The forecast also gave new impetus to Ibovespa, which recorded the third consecutive session of double records: intraday maximum at 164.551 points, nominal close at 164.456 points, up 1.67% on the day. The dollar, in turn, closed stable against the riyal, in contrast to the slight rise of the US currency abroad.
In the political scenario, Congress approved the 2026 Budget Guidelines Bill (PLDO), with the provision to push parliamentary amendments. The text also specifies that the contingency should target the minimum target of the primary outcome. Now, the text goes to President Luiz Inacio Lula da Silva (Workers’ Party) for approval.