The dollar fell on Wednesday morning (3/12), a day when investors turned their attention to local political news in Brasilia.
Overseas, the market follows the release of private sector employment data in the United States. The performance of the labor market is one of the components that the North American central bank takes into account when setting the interest rate.
dollar
- At 9:04 a.m., the US currency fell by 0.25% and was trading at R$5.317.
- The previous day, the dollar ended the session down 0.52%, reaching R$5.33.
- As a result, the US currency accumulated losses of 0.1% per month and 13.75% per year against the real.
Ibovespa
- Trading on Ibovespa, the main index on the Brazilian Stock Exchange (B3), begins at 10 a.m.
- The index closed the previous session up by 1.56% at 161 thousand points. It was the new historic closing record.
- As a result, the Brazilian Stock Exchange achieved gains of 1.27% in December and 33.93% in 2025.
A crisis between the government and the legislative authority
In the domestic scenario, investors are contemplating the clash between the federal government and the National Congress, amid uncertainty over the appointment of the Attorney General of the Federation, Jorge Mesías, to a seat on the Supreme Federal Court (STF).
On Tuesday (2/12), the President of the Senate, Davi Alcolombre (Uniao Brasil-AP), announced the cancellation of the hearing for Messias, which was to be held next week. The parliamentarian blamed the executive branch, which did not officially send the nomination to the Senate.
In a memorandum read to senators in the plenary session, Alcombre stated that he set December 3 to read the opinion of the nomination rapporteur and December 10 to listen and vote on the nomination.
The President of the Senate explained that “setting this calendar follows the pattern adopted in previous nominations, and its goal was to ensure compliance with this constitutional assignment to the Senate in the fiscal year 2025, and to avoid postponing it until next year. But after setting the dates by the legislative authority, the Senate was surprised by the absence of sending the written message regarding the nomination, which had previously been published in the Official Gazette of the Federation and widely announced.”
Alcombre also accuses the government of President Luiz Inacio Lula da Silva of “omission” in not sending the official message nominating Messias before the hearing.
“This omission, the exclusive responsibility of the executive branch, is serious and unprecedented. It is an interference in the scheduling of hearings, which is the prerogative of the legislature. To avoid the possible allegation of a procedural defect in the nomination process – given the possibility of holding the hearing without officially receiving the message – this Presidency and the Committee on the Constitution and Justice (CCJ) determine to cancel the submitted calendar,” the President of the Senate said, without announcing a new date.
Government officials viewed the announcement of the cancellation of the hearing as an interruption in the coordination of the STF nominee among senators. Now, the government base will face the challenge of restoring the relationship with the parliamentarian to ensure Mesías’ approval on the court in 2026.
The hearing in the Senate Constitution and Justice Committee was scheduled for December 10, with the possibility of general approval on the same day. It was Alcombre’s desire that Lula nominate an ally, Senator Rodrigo Pacheco (PSD-MG), for the vacancy opened by the retirement of former Minister Luis Roberto Barroso.
Lula announced the name of the chosen one on November 20. The timetable set by the Senate President was viewed by government supporters as a maneuver by the parliamentarian to give Messias little time to express agreement among senators.
Vote on the budget
Another topic on the legislative agenda that has been monitored by investors and market analysts is a potential vote on the 2026 Budget Guidance Bill (PLDO). This could happen on Wednesday in the Joint Budget Committee.
The set of guidelines determines how the federal government will spend the following year’s budget. Among them is achieving a surplus in public accounts, that is, the “laxity” that the government will enjoy in the annual budget.
The government is looking for a break in the budget, as 2026 will be the year of elections. After approving income tax (IR) exemption for those earning up to R$5,000, the executive needs to close public accounts and compensate for the revenue shortfall. To this end, the head of the Senate Economic Affairs Committee, Renan Calheiros (MDB-AL), proposed a text that would increase taxes on betting and fintech.
Expectations of the increase in bets will be from 12% to 24%, and the new rate will be distributed gradually from 2026 to 2028. For financial technology, the increase will be from 9% to 15%. Next year’s revenues are expected to reach R$4.98 billion. Within three years, the value of these measures could reach R$18.04 billion.
Employment in the United States of America
Internationally, the market reflects US private sector job openings data in November. These figures were released by the ADP Research Institute, in partnership with the Digital Economy Lab at Stanford University.
In October, the United States recorded 42,000 job opportunities in the private sector. The result was higher than market estimates, which expected the creation of 32,000 jobs.
In September of this year, the United States closed 29,000 private sector jobs (revised data).
The ADP survey also showed that salaries in the private sector rose, on average, by 4.5% in October, in a year-over-year comparison. The difference was the same as the previous month.
Analysts fear that the acceleration of the US labor market will lead to a new tightening of monetary policy by the Federal Reserve Bank (Fed, North America’s central bank). On the other hand, weak employment data would fuel more pessimistic expectations that the US economy may enter a recession in the coming months.
Currently, the country’s interest rate is between 3.75% and 4% annually (after a 0.25 percentage point cut at the last Fed meeting), and most market analysts are betting on another rate cut by the end of 2025.
According to CME Group’s FedWatch tool, the probability of a new 0.25 percentage point cut in US interest rates is 89.2%. On the other hand, 10.8% of investors are betting on maintaining the current level. The next Fed meeting is scheduled to be held next week, on December 9-10.
analysis
According to Bruno Shahini, investment specialist at Nomad, the sequence of Ibovespa records “reflects a sustained movement due to falling long-term interest rates around the world and the expectation of new cuts by the Fed, which has fueled global appetite for risk and directed foreign flows to emerging markets.”
“Domestically, the combination of still high real interest rates, a depressed stock market, cash-generating companies, and the prospect of an easing of monetary policy in Brazil from 2026 onwards, creates a structurally favorable environment for variable income. Against this background, technical factors are fueling the rally: a lower historical allocation of individuals to stocks and a weaker dollar on the international scene, which tends to benefit currencies and assets from emerging countries.”
“Added to this are the growing expectations surrounding the electoral process, which the market interpreted as a potential vector of change in the economic trend, adding more momentum to the recent movement of the index,” Shahini continues.
According to the Nomad expert, “This movement could extend into the first half of next year, especially if the cycle of rate cuts in Brazil is deeper than what is currently priced in the market and if monetary policy in the US remains expansionary, keeping the global liquidity environment favorable.”
“However, from the second half of 2026, the electoral scenario should gain greater importance and tends to become the main driver of the price of domestic risk assets, especially Ibovespa. We should expect more volatility and a less clear price trend as the electoral scenario intensifies.”