FX.co ★ Ibovespa Slips as Selic Decision Looms Amid Middle East Tensions

The Ibovespa slipped below 180,500 on Wednesday as investors awaited the Central Bank’s decision on the Selic rate, seen as a key signal of how policymakers are balancing growth and inflation risks amid the conflict in the Middle East. Markets are pricing in the first rate cut since May 2024, but caution prevails in light of rising geopolitical tensions. Higher oil prices, driven by concerns over supply disruptions in the region, have intensified inflationary pressures, fueling worries about increased bond yields and weaker credit demand. Banking shares retreated, with Bradesco down 1% and Itaú off 0.6%. Vale also lost 1%, weighed down by falling iron ore prices as higher freight costs constrained steel exports. In contrast, Petrobras gained 1%, supported by stronger oil prices and news of a newly discovered natural gas reserve.