New York futures trade mixed after high on eve with Fed, Europe climbs ahead of ECB; Check out today’s market highlights

European stock markets are trading on the upside, while New York futures indexes are trading in a directionless fashion on Thursday (2), with markets digesting the milder high of 0.25 percentage point (pp) in interest rates US interest rates on the eve of and pending interest rate decisions from the European Central Bank (ECB) and the Bank of England (BoE).

In his speech, the president of the Federal Reserve (Fed), signaled that the “disinflationary process is in the initial stages”, while “inflation expectations seem well anchored”, so as to cheer the Wall Street markets, which closed in high in the last session.

Already on this date, most analysts believe that the European Central Bank (ECB) and the Bank of England should raise interest rates by another 50 basis points (0.5 pp) at today’s meeting.

In the US earnings season, after the above-expected results of Meta, owner of Facebook, today is the turn of Alphabet (parent company of Google), Apple and Amazon. Investors will be watching the results as these companies embarked on a wave of layoffs earlier this year.

In Brazil, the Central Bank’s Monetary Policy Committee (Copom) kept the Selic at 13.75% for the fourth time in a row and, according to many analysts, voided the chances of interest rate cuts in 2023.

The earnings season is still gaining ground and this Thursday (2nd) brings the results of Santander Brasil (SANB11), the first major bank to publish its quarterly financial statements.

Still in the crosshairs of companies, Oi (OIBR3) has asked the Rio de Janeiro Justice for an injunction to protect it from creditors with whom it holds around R$ 29 billion in debt, including banks and bondholders, in a step that could precede the un new judicial recovery process for the company, according to a Reuters report.

From a political point of view, Rodrigo Pacheco and Arthur Lira were re-elected respectively to command the Senate and the Chamber.

1. World Scholarships

WE

US index futures traded without definite direction on Thursday morning after Fed Chairman Jerome Powell signaled progress in easing inflationary pressures, even with the US BC warning of further monetary policy tightening.

Powell said he wasn’t sure when the central bank would halt its rate hikes as it forges ahead with its efforts to control inflation.

On the corporate front, Meta shares rose more than 19% in the aftermarket after the company topped fourth-quarter revenue projections and announced a $40 billion share repurchase.

Investors will also be watching data on jobless claims, productivity, labor costs and industrial orders today.

See how the futures markets performed:

• Dow Jones Futures (US), -0.12%
• S&P 500 Futures (US), +0.51%
• Nasdaq Futures (United States), +1.40%

Asia

Asian markets finished higher, except for Hong Kong’s Hang Seng index, with investors echoing the Fed’s rate hike minor by 0.25 percentage point and Fed Chairman Jerome Powell acknowledging that the inflation is declining.

Investors are watching the shares of Adani group companies closely after Adani Enterprises withdrew its next $2.5 billion public offering despite the sale being fully underwritten, which many saw as a vote of confidence from part of the investors.

South Korea’s consumer price index rose 5.2% in January year-on-year.

• Shanghai SE (China), +0.02%
• Nikkei (Japan), +0.20%
• Hang Seng Index (Hong Kong), -0.52%
• Kospi (South Korea), +0.70%

Europe

European markets are operating in the blue, with investors preparing for interest rate hikes from the Bank of England and the European Central Bank. Both are expected to raise interest rates by 0.5 percentage point.

• FTSE 100 (UK), +0.57%
• DAX (Germany), +1.52%
• CAC 40 (France), +1.06%
• FTSE MIB (Italy), +1.01%

Goods

Oil prices moved higher in today’s session after rising interest rates in the US led to a lower dollar, making the commodity cheaper for investors in other currencies.

Prices are also rising in the context of the February 5 ban on Russian refined products by the European Union.

Iron ore prices in China fell sharply on Thursday. Prices fell to a two-week low on Thursday as traders reassessed the demand outlook in China despite expectations of more policy stimulus to support the country’s economic recovery.

China’s imports and exports are facing an “extremely dire” environment amid rising risks of a global recession and slowing external demand, a government official said on Thursday.

“We believe that more stimulus and infrastructure spending could be unveiled at the National People’s Congress in March, which is likely to further boost demand for commodities,” said Ewa Manthey, commodity strategist at ING. However, analysts also point out that Chinese regulators, who have warned against excessive speculation on the price of iron ore, could step in to manage any potential upward pressure on commodity inflation.

• WTI crude oil, +0.30%, to 76.64 dollars a barrel
• Brent Crude, +0.21%, to 83.01 dollars a barrel
• Iron ore traded on the Dalian Stock Exchange fell 3.33% to 841.50 yuan, or 125.15 US dollars

bitcoins

• Bitcoin, +1.15% to $23,804.75 (24 hours ago)

2. Schedule

This Thursday’s agenda (2) is marked by the monetary policy decision in Europe. The expectation is that the European Central Bank (ECB) will raise interest rates by another 50 basis points at its meeting which concludes today (2).

In the US, weekly jobless claims are highlighted. Refinitiv’s consensus expects 200,000 applications in the period.

Brazil

9am: Fernando Haddad, Finance Minister, has a meeting with the secretaries

10:30am: Auction of National Treasury Bonds

12:30: Roberto Campos Neto, BC president, has a meeting with Richard Back, Chief of Cabinet of the Institutional Relations Secretariat of the Presidency of the Republic (closed to the press)

14:00: Campos Neto meets Senator Irajá Silvestre Filho (PSD/TO) and Marcelo Cavalcante Baza, partner of Reservas Inteligentes (closed to the press)

17: Lula meets Finance Minister Fernando Haddad

United States of America

10:30am: Weekly jobless claims, with Refinitiv consensus expecting 200,000 claims

10.30am: Industry orders for December; Refinitiv’s consensus estimates a 2.2% increase from November

eurozone

10.15am: ECB decides on rates; Refinitiv consensus project deposit rate at 2.50%

England

9am: Bank of England decides on rates; Refinitiv consensus expects interest rate at 4%

3. Economic news

Copom could keep Selic at 13.75% longer, analysts say

The Central Bank’s Monetary Policy Committee (Copom) has once again decided to keep the Selic rate at 13.75%. For the fourth consecutive meeting, the authority chose not to change interest rates. The decision was unanimous.

Deteriorating inflation expectations due to fiscal uncertainty and the risk of rising disinflation costs were the messages picked up by the market.

Andrea Damico, partner and chief economist of Armor Capital, underlined that Copom has made a slight modification to the section that mentions the possibility of maintaining the rate, changing the “sufficiently prolonged period” to “a longer period” as a strategy to guarantee the convergence of inflation to the target.

Adauto Lima, chief economist at Western Asset, agrees that the message was very clear that fiscal uncertainty, a major driver of deteriorating expectations, will make the central bank more cautious, holding the rate at 13.75% for longer. long. previously expected.

4. Political news

Congressional elections

Senator Rodrigo Pacheco (PSD-MG) confirmed his favoritism and was re-elected last Wednesday as president of the federal Senate for the next two years. He received 49 of 81 votes in the first round and defeated Rogério Marinho (PL-RN), supported by 32 colleagues in a secret ballot.

Pacheco’s performance fell short of his first victory in charge of the Legislative House, when he defeated Simone Tebet (MDB-MS) by 57 votes to 21. Even so, the 49 votes is a relevant vote, which corresponds exactly to the quorum necessary for the legislative approval of the Proposed Amendments to the Constitution (PEC). On the other hand, an indication of challenges for the government.

As a demonstration of political strength, Arthur Lira (PP-AL) was also re-elected, on Wednesday (1st), president of the Chamber of Deputies, in the first round, with 464 votes out of the 513 MPs previously installed for the 57th legislature.

5. Corporate Radar

Petrobras (PETR4)

Petrobras reported that, in a session held yesterday, the First Panel of the Superior Chamber of Tax Appeals (CSRF), a member of the Administrative Council of Tax Appeals (CARF), rejected the appeals filed by the state-owned company and decided that IRPJ and CSLL would be due in relation to the profits of its overseas subsidiary for the years 2011 and 2012.

With the decision, the corresponding tax debts, which today amount to approximately R$ 5.7 billion, become definitive at the administrative level. In this way, Petrobras says it will take the appropriate legal steps to challenge the collection, as well as guarantee the debt.

Oi (OIBR3) has asked the Rio de Janeiro Justice for an injunction to protect it from creditors with which it holds about BRL 29 billion in debt, including banks and bondholders, in a step that could precede a new bankruptcy process for the company, according to to documents seen by Reuters on Wednesday.

The company claims it has been trying to reach an agreement with creditors to refinance its debt, but has so far been unsuccessful.

(With Estadão, Reuters and Agência Brasil)

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