FX.co ★ Ibovespa Sees Strong Gains

On Tuesday, the Ibovespa experienced a 1.7% increase, closing at 137,914, driven by favorable inflation data, robust corporate earnings, and growing optimism about upcoming governmental measures to mitigate US tariffs. Brazil’s annual inflation rate declined to 5.23% in July from 5.35% in June, coming in below the anticipated market forecast of 5.33%. Concurrently, a positive US Consumer Price Index report heightened expectations for a potential Federal Reserve rate cut in September, along with the acceleration of Selic rate reductions anticipated by late 2025. The momentum was further fueled by corporate earnings, notably with Sabesp seeing a remarkable 10.2% surge following its adjusted EBITDA and profits exceeding market consensus. Meanwhile, iron and steel producers were buoyed by indicators of production cuts in China, which propelled Vale's shares up by 1.2%. Additionally, investors are keenly awaiting a government contingency plan aimed at sectors affected by the recent 50% US tariff on Brazilian goods. Finance Minister Fernando Haddad has outlined possible solutions, including credit lines, deferred tax payments, governmental purchases of unsold exports, and structural reforms to enhance foreign sales.