FX.co ★ Ibovespa Starts Week Strong

On Monday, the Ibovespa dipped 0.8% to conclude at 160,870. Despite this decline, a relief reaction to developments in Venezuela redirected investor focus towards growth and commodities, consequently boosting global prices and supporting mining stocks. Vale rose by 1.1% as Chinese steelmakers increased their iron ore purchases in preparation for the Lunar New Year, thereby elevating benchmarks and benefitting related entities. Fueled by geopolitical tensions, precious metals saw an uptick, which bolstered sentiment throughout the mining industry. Similarly, oil prices firmed due to the same geopolitical narratives, providing some backing for energy-related stocks, despite certain domestic producers experiencing specific weaknesses. Beyond the realm of commodities, a concurrent rally in US equities enhanced global risk appetite, maintaining investment flows into Brazilian assets, as investors assessed the events as unlikely to cause a sustained regional disruption. Domestically, record-low unemployment rates have strengthened expectations of persistent consumption and investment, especially supporting cyclical sectors and banks.