Ibovespa, the benchmark stock index in Brazil, closed almost stable (+0.06%) at 85,602.49 points Monday, amid increasing external tension after the United States Treasury yields has reached the highest level in almost four years, which could divert investment to these securities.
“There is a milestone for the market, which is the United States 10-year yield reaching three percentage points. When it comes close to that, everyone is aware and takes money from emerging markets,” noted Codepe Corretora economist Jose Costa.
Tensions with U.S. Treasuries yields eased in the late afternoon, bringing relief to emerging markets as a whole and pulling the Ibovespa into positive territory. Rising oil prices abroad also supported the Ibovespa.
According to Spinelli Corretora analyst, Glauco Legat, the uncertainty of the Brazilian electoral scenario also affected the market, with a DataPoder360 survey showing that Geraldo Alckmin’s candidacy got no traction so far.
For Tuesday, Legat projects a day like today, oscillating near stability, due to electoral uncertainty and the prospect of new intention voting polls to emerge. Costa expects the index to rise close to 86,000 points, past the tension with the Treasuries yields.
The global appreciation movement of the U.S. dollar and the rise in U.S. Treasury yields pushed the locally traded U.S. dollar to climb for the third straight day (+1.17%), closing at the highest level since December 2, 2016, quoted at R$ 3.453.
The material has been provided by InstaForex Company – www.instaforex.com