FX.co ★ Ibovespa Falls as Political Risks Mount

The Ibovespa slipped below 186,000 on Thursday, pressured by mounting political uncertainty and its impact on Brazil’s economic outlook. A dispute between Supreme Court justices Alexandre de Moraes and André Mendonça has escalated into an institutional crisis. The clash centers on failed lender Banco Master, which is being investigated in a bank fraud case, and on Mendonça’s disclosure of private messages he claims were sent by Moraes. The public confrontation has raised doubts about the court’s credibility, heightening political risk ahead of October’s presidential election.

At the same time, oil prices extended their rally after the largest wave of attacks on shipping in the Strait of Hormuz by Washington and Tehran on Wednesday, while global bond yields climbed on concerns that inflation will remain elevated for longer. In equities, financials retreated, with Itaú down 0.5% and BB Seguridade losing nearly 2%. Among miners, Vale dropped 2%, and CSN Mineração slid more than 3.5% amid weaker iron ore prices. In contrast, Petrobras advanced 1.5%, supported by the rise in oil prices.