Scholarships, oil soar as China reopens; Lula will hold an emergency meeting with governors and representatives of the Powers

World markets are positive on Monday (9), reflecting a new reopening of the Chinese economy. China and Hong Kong resumed travel without quarantine over the weekend, marking the end of the Covid Zero policy that had kept their borders closed for nearly three years.

Oil prices are also soaring due to the prospects for fuel demand boosted by the reopening of the Chinese border.

In terms of indicators, the week will be marked by inflation data from Brazil and the US, as well as other activity data here.

The extended consumer price index (HICP) for December is released tomorrow (10) and Bradesco expects it to rise 0.43% for the month on a monthly basis, ending the year at 5.6%.

Read more: The repercussions of the live market after the invasion in the DF

On the national scene, President Lula decreed federal intervention in the public security of the Federal District on Sunday afternoon (8), after groups of Bolsonarist coup leaders invaded the National Congress, the STF and the Planalto Palace.

In the early hours of the morning, Minister Alexandre de Moraes, of the Supreme Federal Court (STF), ordered the removal from office of Ibaneis Rocha (MDB), governor of the Federal District, for an initial period of 90 days and the vacancy , in 24 hours, the camps of supporters of former President Jair Bolsonaro (PL) set up in the vicinity of barracks and other military units across the country.

The governors will meet this Monday (9) with President Luiz Inácio Lula da Silva (PT) and with representatives of the Federal Supreme Court (STF). The meeting is scheduled for 6pm.

1. World Scholarships

WE

US futures indices are trading at record highs this morning, continuing the rally seen last Friday (6), when the December jobs report signaled that inflation may be easing as wage growth slows, the which has fueled hopes that the US central bank’s rate hikes are hitting their target.

The agenda of US indicators is busy, with emphasis on the December consumer price index, which should be published on Thursday, followed by the earnings of the big banks on Friday. The New York Fed’s Consumer Expectations Survey, along with consumer credit data, will be released on Monday. Investors will also be paying attention to comments from Atlanta Fed Chairman Raphael Bostic.

See how the futures markets performed:

• Dow Jones Futures (US), +0.09%
• S&P 500 Futures (US), +0.19%
• Nasdaq Futures (US), +0.25%

Asia

Asian markets closed at an all-time high, with China reopening its borders with Hong Kong without the need for quarantine.

With this, the second largest economy in the world practically ends the quarantine of other administrative regions. However, local officials said the reopening should be done gradually and in an orderly manner.

Hong Kong’s Hang Seng Index rose 1.77%, with technology stocks leading gains alongside travel and consumer names. In China, the Shanghai Composite rose 0.58% to 3,176 points.

• Shanghai SE (China), +0.58%
• Nikkei (Japan), +0.59%
• Hang Seng Index (Hong Kong), +1.89%
• Kospi (South Korea), +2.63%

Europe

European markets start the week strong, with renewed optimism about the new reopening of the Chinese economy. Hong Kong and China have resumed travel to each other without needing to quarantine over the weekend.

German industrial production for December rose 0.2%, slightly above market consensus. Investors are still echoed by the unemployment rate in the Eurozone, which closed the month of November at 6.5%, stable compared to October, but down from the 7.1% recorded in November 2021.

• FTSE 100 (UK), +0.20%
• DAX (Germany), +0.25%
• CAC 40 (France), +0.10%
• FTSE MIB (Italy), +0.40%

Goods

Oil prices rose sharply in today’s session as the China-Hong Kong border reopened, boosting fuel demand prospects and partially offsetting fears of a global recession.

Iron ore prices in China, however, are trading lower as concerns over the country’s rising Covid cases are still on investors’ radar.

Also, the announcement of maintenance work at some blast furnaces and steel mills by some steelmakers dampened the sentiment of the iron ore market slightly after the rally in the commodity.

• WTI Crude Oil, +3.00%, to $75.98 a barrel
• Brent Oil, +2.93%, at 80.87 dollars a barrel
• Iron ore traded on the Dalian Stock Exchange fell 2.49% to 823.00 yuan, or $121.40

bitcoins

• Bitcoin, +1.42% to $17,201.70 (24 hours ago)

2. Schedule

The domestic and international economic agenda will be very busy, with focus primarily on inflation indicators in Brazil and the US, plus other activity data here.

In Brazil, the extended consumer price index (HICP) for December will be released on Tuesday (10).

On Wednesday (11), the IBGE is to release Monthly Survey of Commerce (PMC) data for November, i.e. retail sales notes, which are expected to reflect sales trends over Black Friday, Bradesco assesses.

Next on Thursday is the Monthly Services Survey (PMS), also published by the IBGE.

On Friday, the Central Bank releases the November IBC-Br, considered a preview of GDP.

On the international agenda, the top release is December CPI on Thursday. Before then, on Tuesday, the highlight will be a speech by Jerome Powell, chairman of the Federal Reserve, on the next steps in US monetary policy.

Brazil

8:00: Weekly CPI-S index

8:25 am: Focus Bulletin

10:30am: Weekly trade balance

3. Economic news

Petrobras refineries (PETR4) are in the crosshairs of undemocratic acts, says FUP

The Single Federation of Oil Workers (FUP) has mapped the evolution of political demonstrations at Petrobras units (PETR3;PETR4) by former President Jair Bolsonaro’s (PL) allies. Through social networks, the group has called for new acts against the current government in the company’s refineries, with a focus on the Duque de Caxias (Reduc) refinery, in Rio de Janeiro, on Monday 9.

“Today there were no demonstrators in Reduc. But it is worth highlighting several messages circulating on social networks inviting the presence of protesters in Reduc and at petrol stations in Caxias. Military police are on site,” the FUP reported.

The goal of the anti-democratic call is to block tanker access to the bases of fuel distribution companies, on the grounds that without fuel Brazil will stop

4. Political news

Moraes determines the removal of the governor of the DF after the vandalism in Brasilia

Minister Alexandre de Moraes, of the Federal Supreme Court (STF), decided, early Sunday (8), the removal from office of Ibaneis Rocha (MDB), governor of the Federal District for an initial period of 90 days.

The decision comes after a group of coup plotters invaded and vandalized the Planalto Palace, the National Congress and the STF itself, in acts similar to the invasion of the Capitol (the United States Congress) two years ago in the United States.

Moraes also ordered the evacuation, within 24 hours, of camps of supporters of former President Jair Bolsonaro (PL) set up near barracks and other military units across the country.

Federal public safety intervention

President Luiz Inácio Lula da Silva (PT) decreed federal public security intervention in the Federal District on Sunday afternoon after an invasion in Brasilia.

“The objective of the intervention is to put an end to the serious deterioration of public order in the State in the Federal District, marked by acts of violence and invasion of public buildings”, reads an excerpt from the decree.

The National Congress will interrupt the legislative suspension to vote between today and tomorrow on the federal intervention decreed by Lula in the public safety of the DF.

covid

On Sunday, Brazil recorded 9 deaths from covid-19 in the past 24 hours, for a total of 694,909 since the start of the pandemic.

With that, the rolling average of deaths over the past 7 days is 137. Compared to the average 14 days ago, the change was -6%.

In total, the country recorded 3,665 new Covid-19 diagnoses in 24 hours, completing 36,504,006 known cases since the start of the pandemic.

Petrobras (PETR3; PETR4) will make a maintenance stop at the Alberto Pasqualini Refinery (Refap), located in Canoas (RS). The parade should start in the second half of January.

The state company will invest 450 million reais to ensure the reliability of the refinery, as well as carry out projects that increase energy efficiency and process safety.

The services will be performed in the catalytic cracking, distillation, hydrogen generation and diesel and gasoline treatment units, with maintenance, inspection and replacement of parts and equipment.

Aliansce Sonae (ALSO3) and brMalls (BRML3)

Aliansce Sonae (ALSO3) and brMalls (BRML3) announced on Friday evening the completion of the corporate merger of the companies. Also on Friday, trading of shares issued by brMalls on B3 under the ticker BRML3 concluded, as announced by the companies on 19 December.

The companies will continue to pursue their businesses, maintaining the registration of Aliansce Sonae as a public company and the listing of its shares in the Novo Mercado segment of B3, making brMalls a wholly owned subsidiary of Aliansce Sonae.

With the closing of the transaction, the shares issued by brMalls will no longer be traded on the Novo Mercado segment of B3 and the necessary measures will be taken so that its registration as a public company is converted from category “A” to category “B” and maintained during the circulation of the other securities issued by it.

(With Estadão, Reuters and Agência Brasil)

Related