New York futures is trading steady, with a busy schedule in the US; State law and the minimum wage on the radar and other highlights

New York futures indices traded near stability on Wednesday (18), ahead of the release of a set of US economic indicators, with emphasis on the producer price index (PPI) for December , which should provide more clues about where interest rates are heading in the world’s largest economy.

In addition to inflation data, investors are awaiting retail sales, industrial production and the Federal Reserve’s (Fed) Beige Book report on the US economy.

Also in the USA, speeches are expected from members of the American Central Bank, Raphael Bostic, Lorie Logan and Patrick Harker.

In Asia, the Bank of Japan (BoJ) surprised markets by keeping the yield curve tolerance band and interest rate at -0.1%.

Ibovespa Today: Highlights from the live transfer market this Wednesday

In these parts, with the agenda of indicators emptied, attention shifts to the minimum wage. President Lula is expected to meet the leaders of the union centers this Wednesday, as well as the minister of labour, Luiz Marinho.

On the eve, Fernando Haddad, finance minister, declared that the decision on the increase in the minimum wage is up to the government and will be taken after negotiation with the trade unions.

Furthermore, according to Valor, the government is already preparing a proposal to amend the state company law, which could affect the shares of companies controlled by the government.

1. World Scholarships

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US index futures traded near stability on Wednesday morning as investors awaited a slew of economic data as well as the publication of the Beige Book and speeches from Fed members.

Market participants are hoping that the data and speeches by US central bank members will provide clues about the direction of the country’s monetary policy.

Additionally, US earnings season continues with results from JB Hunt Transport Services, Charles Schwab, PNC Financial Services Group and Discover on Wednesday.

See how the futures markets performed:

• Dow Jones Futures (US), -0.07%
• S&P 500 Futures (US), +0.03%
• Nasdaq Futures (US), +0.02%

Asia

Asian markets finished directionless, with emphasis on the more than 2% rise in Japan’s Nikkei, which saw its Central Bank announce today that it will not change its yield curve control policy.

The Bank of Japan kept interest rates at -0.1% and made no changes to the yield curve control band.

Bank of Japan Governor Haruhiko Kuroda told a news conference that there is no longer a need to expand his range of yield curve control, according to Reuters.

In return, the Japanese yen weakened by 2.04% against the dollar shortly after the announcement of the decision.

• Shanghai SE (China), +0.00%
• Nikkei (Japan), +2.50%
• Hang Seng Index (Hong Kong), +0.47%
• Kospi (South Korea), -0.47%

Europe

European markets are trading mixed today, reflecting UK and Eurozone inflation data and awaiting various economic data out of the US.

The annual rate of inflation in the UK fell to 10.5% in December, slightly below market consensus. The result marked the second month of declines after the rate dropped from a 41-year high to 10.7% in November.

Inflation in the Euro Area from November to December fell by 0.3% compared to November and increased by 9.2% on an annual basis. Refinitiv’s consensus forecast is down 0.3% month over month and up 9.2% year over year.

• FTSE 100 (UK), +0.14%
• DAX (Germany), -0.08%
• CAC 40 (France), +0.14%
• FTSE MIB (Italy), +0.03%

Goods

Oil prices advanced in today’s session, extending gains from the day before, boosted by optimism that an easing of strict Covid restrictions in China will lead to a recovery in fuel demand at the world’s largest oil importer.

The Organization of the Petroleum Exporting Countries (OPEC) said in a monthly report that China’s oil demand will grow by 510,000 barrels per day (bpd) this year, after posting its first contraction in years in 2022 due to the Covid containment measures.

Iron ore prices in China also rise on optimism surrounding the reopening of China’s economy.

• WTI crude oil, +0.66%, to 80.75 dollars a barrel
• Brent Oil, +0.44%, at 86.30 dollars a barrel
• Iron ore traded on the Dalian Stock Exchange rose 0.90% to 841.50 yuan, or $124.43

bitcoins

• Bitcoin, -0.54% to $21,225.85 (24 hours ago)

2. Schedule

US retail sales, industrial production and producer price index data for December will be released today. Also pay attention to the Federal Reserve’s Beige Book, a report on the US economy.

Here, investors follow the weekly exchange rate data.

Brazil

1.00pm: Ibovespa options expire

2.30pm: Weekly FX stream

United States of America

10:30: December producer prices; Refinitiv consensus projects down 0.1% from November, but up 6.8% year over year

10:30am: December retail sales; Refinitiv consensus estimates a 0.8% month-on-month decline

11am: Speech by Fed Chairman Raphael Bostic

11.15am: Industrial production in December; Refinitiv Consensus forecasts a decline of 0.1% compared to November

11:30am: Speech by Fed Chairman James Bullard

12:00: November company inventories; Consensus Refinitiv forecasts a 0.4% increase over the immediately preceding month

4pm: Beige Book

4pm: Speech by Fed Chairman Patrick Harker

6.30pm: Weekly Oil Inventories – API

7 p.m.: Speech by Fed Chair Lorie Logan

3. Economic news

The minimum wage adjustment comes after negotiation with unions, Haddad said

The finance minister, Fernando Haddad, said that the decision on the increase in the minimum wage rests with the government and will be taken after a negotiation with the trade unions. According to him, a discussion table will be opened to define a level for the four-year mandate of President Luiz Inácio Lula da Silva.

“This (minimum wage adjustment) is a government decision and will be made after a negotiating table is set up with the union centers,” Haddad told reporters after attending a parallel event at the World Economic Forum. , in Davos.

The negotiating table aims to define not only a value for this year, but for the next four, according to the minister. “This year we have already recorded a real gain of 1.4%. It is the first time that we have a higher-than-inflation gain and we will open negotiations with the central banks to establish a milestone,” he said.

Lula meets union representatives today

President Luiz Inácio Lula da Silva met with union leaders this morning to start discussions on a new minimum wage policy.

The idea of ​​the union centers is to open a negotiating table with the government to analyze a minimum wage valuation policy and ensure that the value is adjusted above inflation every year, as well as discuss other labor issues.

State Law

According to Valor Econômico, the government is already preparing a proposal to amend the Law on the State, in order to leave more room for allies and unelected parliamentarians in positions on the boards of directors linked to federal public companies and state companies. The initiative is viewed with distrust by market participants and governance specialists, who warn of the risk of a setback for these companies.

According to the newspaper, the draft proposal is being prepared by the Secretariat for Legal Affairs (SAJ) of the Civil House with the support of the Attorney General of the Union (AGU). Subsequently, he specifies, the project provides for an allied senator to accept the suggestions and present a text that replaces the proposal already approved by the Chamber at the end of last year and which stalled in the Senate after the affair generated negative repercussions on the financial market. If it is approved, it will have to go back to the approval of the deputies before proceeding with the presidential sanction.

Where to invest in 2023

How to build a portfolio to hedge against the volatility caused by the start of a new government in Brazil? Where should interest go in the first year of Lula’s government? Is it better to invest overseas or take advantage of the opportunities in fixed income and stock exchanges right here?

To answer these and other questions, the Money info will be held from 16 to 19 January on Where to invest in 2023, a free online event with panels on the most diverse topics that will affect your finances and investments throughout the year. Click here to register and here for the complete programme.

4. Political news

Lula sanctions the Budget with a veto

The 2023 General Budget of the Union was sanctioned on Tuesday (17) by President Lula, and published in an extraordinary number of the Official Journal of the Union. The text provided for a single veto on an article that would create a new budget allocation for the BRL 145 billion outside the ceiling authorized by the Transitional Constitutional Amendment.

According to the explanatory text, the veto was requested by the Ministry of Planning and Budget. The file argued that creating a separate identification would increase the Budget’s inflexibility and inefficiency.

Approved by Congress on December 22, the last day of the legislative year, the 2023 Budget was voted on only after the agreement that allowed the approval of the Transitional Constitutional Amendment, which authorized spending of up to R$ 145 billion beyond the ceiling, plus investments of 23 billion reais if there is excess revenue.

Covid

Brazil recorded 130 covid-19 deaths on Tuesday in the past 24 hours, for a total of 695,591 since the start of the pandemic.

With that, the rolling average of deaths over the past 7 days is 80. Compared to the average 14 days ago, the change was -33%.

In total, the country recorded 1,201 new Covid-19 diagnoses in 24 hours, completing 36,682,799 known cases since the start of the pandemic.

American (AMER3)

Americanas (AMER3) said it was evaluating several opportunities, after being questioned by Brazil’s Securities and Exchange Commission (CVM) over news of an alleged asset sale plan.

According to a report by Valor Econômico, the retailer is evaluating the sale of Hortifruti Natural da Terra, a fresh goods retailer acquired just over a year ago, and its stake in Vem Conveniência, a joint venture with Vibra ([ativo=VBRR3]).

The retailer reiterates that there is no binding fact or document worthy of disclosure and clarifies that the news fits into the context, already known to the market, of the accounting inconsistencies identified for 20 billion reais.

Petrobras (PETR3;PETR4) total oil and gas production was 2.684 million barrels of oil equivalent per day (boed) in 2022, exceeding its 2.600 million boed target by 3.2%, within of the disclosed range of ±4.0%.

Commercial production, in turn, reached 2.361 million boed, 2.7% higher than the 2.3 million boed target, also within the ± 4.0% range.

Oil production came in at 2.154 million barrels per day (bpd), 2.6% above the 2.1 million barrels per day target, and also within the range. ±4.0%.

(With Estadão, Reuters and Agência Brasil)

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