FX.co ★ Ibovespa Slips on Strong Jobs Data

The Ibovespa slipped below 174,500 on Thursday after the release of July labor market data and a rebound in oil prices. Brazil’s unemployment rate came in at 5.3% in the three months through July, matching market expectations. The labor market remains notably robust, with both total employment and the number of formally employed workers at record highs. This strength could prompt the Copom to halt its current pace of 25-basis-point rate cuts per meeting.

At the same time, oil prices recovered after the United States and Iran exchanged accusations over Washington’s pledge to step up economic pressure on Tehran by imposing sanctions on its trading partners, reigniting concerns about energy costs. In equities, financial stocks were mostly weaker, with Itaú, Bradesco, and Itaúsa each down about 0.5%. Caixa inched higher after reporting a 5.9% rise in second-quarter profit and an expansion of its loan portfolio. Petrobras declined nearly 0.5% despite the rebound in oil, as prices remain volatile and are still lower on a weekly basis.