FX.co ★ Brazilian Stocks Close Flat

The Ibovespa ended Monday virtually unchanged at 178,000 points, as gains in financial and utility shares were offset by losses in heavyweight commodity stocks amid easing tensions in the Middle East.

Iran signaled progress in talks to restore commercial shipping through the Strait of Hormuz, after US President Donald Trump called off a planned military strike on the country. The increased likelihood of a diplomatic solution pushed oil prices lower, easing inflation concerns and driving bond yields down. This more benign macro backdrop reinforced expectations that the BCB will cut the Selic rate this week from the current 14.25%.

Financials advanced, with Itaú and Bradesco up 0.6%, while utilities also traded higher, led by Axia with a 1.4% gain. Embraer climbed 3.1% after BNDES approved between R$3.3 billion and R$3.7 billion in financing to support exports of up to 19 aircraft to Canada’s Porter Aviation Holdings.

On the downside, Petrobras (-0.8%) and Vale (-2.1%) weighed on the benchmark, pressured by falling oil and iron ore prices.