The Ibovespa slipped 0.4% on Monday, closing at 170,415, after the latest Focus survey pointed to a further deterioration in inflation expectations. The median forecast for annual inflation in 2026 rose for the 14th consecutive week, from 5.11% to 5.30%, moving even further above the Brazilian central bank’s (BCB) upper target of 4.5%. At the same time, the median projection for the Selic rate at end-2026 increased from 13.5% to 13.75%.
Mounting fears of a more hawkish BCB pressured banking stocks, with Bradesco down 0.8% and Itaú off 0.5%. Petrobras also weighed heavily on the index, shedding 5.1% as oil prices retreated following news that the US and Iran had reached a preliminary peace agreement that would reopen the Strait of Hormuz.
On the upside, Vale advanced 2.5% as iron ore prices gained amid supply concerns tied to a potential strike by BHP workers in Australia. Embraer surged 7.1% after Azorra finalized a purchase agreement for 15 aircraft.