FX.co ★ Ibovespa Rises on Election Polls and Soft PCE Inflation

The Ibovespa advanced 1.4% on Wednesday, closing at 186,341, buoyed by fresh election polling that signaled a tighter presidential race and by softer-than-expected US PCE inflation data. Surveys by Meio/Ideia and Indexa/Broadcast indicated President Lula and Flávio Bolsonaro are effectively tied heading into the final days before the vote, with the Meio/Ideia poll showing a mere 0.5 percentage point gap in a likely second-round runoff scenario.

Abroad, US PCE inflation came in slightly below forecasts, tempering fears of additional interest rate hikes by the Federal Reserve. Domestically, however, Brazil’s PPI accelerated to 2.5% year-on-year in August, up from 1.9% in July, signaling mounting producer-level price pressures.

Financials led gains, with major banks rallying: Itaú and Banco do Brasil each climbed 4.7%, while Bradesco advanced 4.1%. Utilities were also firm, as Sabesp rose 1.4%. In commodities, CSN Mineração rebounded 5.2% after Tuesday’s sell-off—triggered by a cut to its production guidance—helped by higher iron ore prices in China.

For the month, the Ibovespa added 5%.