The Ibovespa edged lower on Friday, closing at 185,147 amid growing expectations of a US Federal Reserve rate hike in September. US nonfarm payrolls rose by 162,000, roughly three times the consensus forecast, reinforcing bets on further monetary tightening. For Brazil, persistently high interest rates in the world’s largest economy constrain the policy space available to the BCB. The prospect of US rates staying higher for longer also dampens investor appetite for risk assets in emerging markets.
Among the main laggards were Axia, which fell 0.8%, WEG, down 0.6%, and Rede D’Or. Petrobras slipped 0.9% despite elevated but volatile oil prices. Losses on the index were partially offset by gains in financial stocks: Bradesco advanced 0.6%, Itaúsa added 1.5%, BB Seguridade climbed 1.1%, and Caixa also rose 1.1%.
On the political front, the latest Datafolha poll, released on Thursday, showed President Lula’s lead over Flávio Bolsonaro narrowing in the presidential race. In corporate news, Embraer gained 1.1% after Brazil reported a stronger-than-expected external trade surplus. Despite Friday’s slight pullback, the Ibovespa ended the week up 5.4%.