Brazil Macro Daily(Beta Mode)
COPOM Poised to Cut on Weak Output
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| Bovespa | 178,550.61 | +0.31% |
| USD/BRL | 5.11 | +0.76% |
| EUR/BRL | 5.89 | +0.67% |
| Vale | 15.06 | +0.47% |
| Petrobras | 19.40 | +1.46% |
| WTI Crude | 75.85 | -5.59% |
| Gold | 4,143.70 | +2.73% |
| Bitcoin | 63,990.07 | +0.83% |
| Brazil Short-term Rate | 14.39% | -0.76% |
| Brazil Long-term Rate | - | - |
Prior Economic Events
| Data | Prior | Cons | Actual |
|---|---|---|---|
| No events available | |||
Brazil Selic Short-term Policy Rate | Type: macro_line | Policy Rate %: 14.39 (2026-06-01) | Range: 5.52–15 | Trend(6pt): 5.52,13.75,11.75,13.64,14.5,14.39
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| Industrial Production Month-over-Month | -0.20 | -0.70 | 04:00 |
| Wednesday (2026-08-05) | |||
| S&P Global Services PMI Index | - | - | 05:00 |
| Central Bank Interest Rate Decision | 14.25 | 14 | 13:30 |
| Thursday (2026-08-06) | |||
| Trade Balance | 9,760m | 8,400m | 10:00 |
- Markets price 25 bp Selic reduction at tomorrow’s COPOM meeting
- Industrial production expected to contract 0.7% m/m after -0.2% prior
- Bovespa rises 0.31% while USD/BRL climbs 0.76% to 5.11
Yesterday's Recap
Bovespa advanced 0.31% to close at 178,550.61 as Petrobras shares gained 1.46% and Vale added 0.47%. USD/BRL rose 0.76% to 5.11 while EUR/BRL increased 0.67% to 5.89. The Brazil short-term rate eased 0.76% to 14.39%.
WTI crude fell 5.59% to 75.85 and gold jumped 2.73% to 4,143.70. No Brazilian data releases occurred on August 3. Bitcoin rose 0.83% amid broader risk-on flows into emerging-market assets.
Trade-sensitive equities outperformed as iron-ore futures held steady despite softer Chinese steel output. The absence of fresh indicators left markets focused on positioning ahead of the industrial production print and COPOM decision.
The Day Ahead
July industrial production month-over-month prints at 04:00 ET today with consensus calling for a 0.7% decline. S&P Global Services PMI follows at 05:00 ET on August 5 alongside the COPOM interest-rate decision at 13:30 ET. Markets fully price a 25 bp cut that would lower the Selic from the prevailing 14.39% level.
The June trade balance release on August 6 is expected to show a USD 8.4 bn surplus. A weaker industrial print would reinforce the case for easing while supporting BRL-funded carry trades. No additional BCB speeches are scheduled before the decision.
Services PMI and the trade print remain the most market-sensitive releases, with a strong surplus likely to support the real and ease external-account concerns at the central bank.
Other Economic Notes
Brazil’s June CPI stood at 4.64% y/y, keeping the central bank inside its tolerance band yet still above the 3% target midpoint. Fiscal authorities announced a R$12 bn package aimed at trimming the 2027 primary deficit to 0.4% of GDP. Iron-ore and soybean export volumes to China rose in July, cushioning the external accounts despite softer global commodity prices.
Real yields on NTN-Bs remain attractive to foreign investors even after the recent compression in the short-term rate. Policymakers continue to emphasize adherence to the new fiscal framework to anchor long-term inflation expectations. The combination of contained inflation and resilient exports provides room for measured easing without immediate balance-of-payments pressure.
