Brazil's Financial Morning Call For September 24, 2025

(MENAFN- The Rio Times) Brazil's financial markets are navigating a complex environment shaped by a surprising diplomatic thaw between U.S. President Donald Trump and Brazilian President Luiz Inácio Lula da Silva, alongside persistent domestic fiscal pressures and global economic signals. At the United Nations General Assembly in New York, Trump and Lula shared a brief backstage encounter marked by friendliness, including a handshake that Trump described as having“excellent chemistry,” with both leaders expressing mutual liking and agreeing to continue talks next week. This detente arrives after months of frozen relations, including U.S. imposition of 50% tariffs on nearly 10,000 Brazilian products earlier this year and sanctions under the Global Magnitsky Act on Brazilian Supreme Court members accused of persecuting former President Jair Bolsonaro. Lula, in his UN speech, rejected these as“unilateral and arbitrary,” defending Brazil's judicial autonomy and sovereignty. The interaction has sparked market optimism by signaling potential tariff relief and normalized trade in agriculture and industrial goods.

This prompted a 1% appreciation of the real and pushed the Ibovespa to record highs. Still, the thaw faces hard realities. Deep economic divides remain, and negotiations are largely transactional, contrasting Trump's unpredictable style with Lula's dialogic firmness.

Structural disagreements also persist, and neither side expects them to be resolved quickly. To counter tariff impacts, Brazil offered exporters R$40 billion in credit lines, underscoring the high stakes for bilateral commerce.

The Central Bank's Copom Meeting Minutes, released yesterday at 7:00 AM BRT, detailed the rationale for holding the Selic at 15%, amid core inflation above 3% and fragile recovery; top economists now forecast gradual easing to 12.25% by end-2026. These developments, combined with today's packed economic agenda, set the stage for heightened market sensitivity. Economic Agenda for September 24, 2025 Brazil (10th Largest Economy, Nominal GDP: ~$2.125 trillion)

• 7:00 AM BRT – FGV Consumer Confidence (Sep): Actual TBD, Consensus TBD, Previous 86.2. Measures household sentiment.

Implication: A rising confidence index could signal rebounding consumer spending, supporting retail and discretionary sectors strained by high Selic rates; declines may reinforce caution in credit-dependent growth.

• 13:30 PM BRT – Foreign Exchange Flows: Actual TBD, Consensus TBD, Previous -0.163B. Tracks net capital inflows.

Implication: Positive flows would bolster the real and equities amid diplomatic optimism, while outflows could amplify volatility from U.S. policy signals. United States (Largest Economy, Nominal GDP: ~$30.50 trillion)

• 8:30 AM BRT – Building Permits (Aug): Actual TBD, Consensus 1.312M, Previous 1.362M. Permit levels.

Implication: U.S. housing data and oil inventories will gauge demand for Brazil's commodities; softer permits/sales could pressure exports, while drawdowns in stocks support oil prices above $67/barrel, aiding Petrobras. Fed's Daly may clarify gradual cuts post-25 bps reduction to 4.00-4.25%, influencing global flows and real strength.

• 10:00 AM BRT – New Home Sales (Aug): Actual TBD, Consensus 650K, Previous 652K. Sales volume.
• 10:30 AM BRT – Crude Oil Inventories: Actual TBD, Consensus TBD, Previous -9.285M. Weekly oil stocks.
• 16:10 PM BRT – FOMC Member Daly Speaks: Actual TBD, Consensus TBD, Previous TBD. Policy insights.

Europe (Collective GDP of Key Economies: Germany, UK, France, etc.)

• 04:00 AM BRT – EUR German Ifo Business Climate Index (Sep): Actual TBD, Consensus 89.3, Previous 89.0. Overall climate.

Implication: German Ifo data will signal Eurozone health, impacting demand for Brazil's steel/soy; stronger readings could ease tariff pressures via diversified exports, while BoJ CPI influences yen and Asian commodity flows. Other Countries Mexico (11th Largest Economy, Nominal GDP: ~$2.00 trillion)

• 08:00 AM BRT – 1st Half-Month Core CPI (Sep): Actual TBD, Consensus 0.20%, Previous 0.09%. Core inflation.
• 08:00 AM BRT – 1st Half-Month CPI (Sep): Actual TBD, Consensus 0.19%, Previous -0.02%. Headline inflation.

Implication: Mexico's CPI may sway Banxico's 25 bps cut to 7.50% on September 26, reducing Mercosur volatility but amplifying U.S. yield spillovers to the real-peso pair. Canada

• 8:30 AM BRT – Manufacturing Sales (MoM) (Aug): Actual TBD, Consensus TBD, Previous 2.5%. Factory sales.

Implication: Strong sales could boost commodity demand, supporting Brazil's oil/agricultural exports amid stabilizing crude. Japan (3rd Largest Economy, Nominal GDP: ~$4.10 trillion)

• 19:50 PM BRT – JPY Monetary Policy Meeting Minutes: Actual TBD, Consensus TBD, Previous TBD. BoJ insights.

Implication: BoJ minutes could signal yen policy, affecting demand for Brazil's steel/agricultural exports via Asia. Australia

• 21:30 PM BRT – AUD Weighted Mean CPI (YoY) (Aug): Actual TBD, Consensus 2.90%, Previous 2.80%. Trimmed inflation.

Implication: Australian CPI may influence Asia-Pacific commodity demand, affecting Brazil's agricultural exports. South Africa

• All Day – Holiday: Heritage Day (Markets closed).

Implication: Delayed data may heighten emerging market sentiment risks for Brazilian commodities. South Korea

• No events listed.

Why These Events Matter: Brazil's FGV Consumer Confidence will highlight spending trends critical for retail amid Selic highs and diplomatic boosts; FX flows track capital amid thaw optimism. U.S. housing/oil data drive commodity demand and global yields, while German Ifo shapes Eurozone exports. Mexican CPI tempers regional ties, with Canadian/Japanese indicators influencing trade partners. Geopolitical risks, including U.S. sanctions and tariff realities, layer outlooks despite detente hopes. Brazil's Markets Yesterday Official market reports confirm the Ibovespa index closed at 146,424.94 points on September 23, 2025, up 0.91%, surging to its first-ever close above 147,000 points after an intraday record of 147,178.47 points. The advance reflected a dramatic shift in U.S.-Brazil relations, with investors scrambling to buy assets across sectors following the Trump-Lula handshake at the UN and announced meeting next week, easing 50% tariff fears that had frozen trade. Brazilian retailers dominated winners, with Companhia Brasileira de Distribuição jumping 4.12%, Raia Drogasil gaining 3.92% to 18.30 reais, and Localiza surging 3.73% to 40.59 reais on bets for rising business travel. Banking stocks rose, led by Banco do Brasil +2.88% ahead of its New York presentation, Itaú Unibanco +1.59%, and BTG Pactual +1.40%. Petrobras added 1.8% as crude stabilized above $67/barrel, with easing Iraqi disruptions. Cosan rebounded 3.26% post its R$10 billion raise, viewed as strategic for debt halving and ethanol/rail/gas growth. The index trades 0.5% above its five-day moving average, with RSI at 77.2 signaling overbought conditions and normal volume at 7.8 billion shares, lacking heavy institutional push. Support at 141,611 points, resistance at 147,178; the rally's sustainability ties to Trump-Lula outcomes. Read more U.S. Markets Yesterday All three major U.S. indexes retreated on September 23, 2025, led by declines in major technology stocks, breaking their streak of record highs. The Nasdaq dropped nearly 1%, weighed down by artificial intelligence sector heavyweights like Nvidia, Amazon, and Oracle. The S&P 500 fell around 0.6%, while the Dow slipped about 0.2%. The pullback followed cautious remarks from Federal Reserve Chair Jerome Powell, who signaled gradual future rate cuts and concern over elevated stock valuations, tempering enthusiasm from prior easing expectations and AI gains. Broader sentiment reflected a pause after strong rallies, with economic data showing less robust manufacturing/services growth. Year-to-date gains remain solid, underscoring U.S. equities' resilience. Mexico's Market Yesterday Mexico's S&P/BMV IPC index rose 0.5% to 62,326 points on September 23, 2025, with lighter trading volumes reflecting global caution rippling through emerging markets. The peso fell to 18.36 per dollar, trading below key four-hour/daily moving averages, with potential weakness to 18.20 amid Fed high costs and slowing growth. Top performers included América Móvil on new subscriber gains; banks lagged on narrowing interest margins. Core inflation at 4.23% tempers Banxico's expected 25 bps cut to 7.50% on September 26, with higher U.S. yields threatening liquidity. Institutional focus eyes rate decisions and risk assets. Read more Argentina's Market Yesterday The S&P Merval climbed back above 1.815 million points on September 23, 2025, after dipping below its 50-day moving average of 1.830 million, catching a breath post-policy jolt. Country risk remained elevated above 1,200 basis points, with bond yields demanding steep premiums. The peso's blue rate eased to 1,450 per dollar from 1,475 peak, official at 1,367.50; the central bank intervened via reserve sales to curb slides. Local equities rose with the rebound, though Global X MSCI Argentina ETF saw $6.1 million outflows, its fifth red day. Technicals: Daily RSI to 43 from oversold, MACD histogram positive; four-hour bullish crossover, support 1.753 million/resistance 1.832 million. Read more Colombia's Market Yesterday The COLCAP index paused at 1,871.46 points on September 23, 2025, reflecting quiet strength after a summer rally. The peso traded at 3,860.47 per USD at open, dipping below its two-week moving average but recovering above 3,840 and crossing short-term four-hour MA, buoyed by 9.25% rates attracting 22% more Q2 foreign investment. Drivers included dollar weakness (DXY below 97 to 97.3) and stable commodities like oil easing costs but weighing energy. Energy/finance saw $1.2B/$900M inflows; industrials lagged. Inflation at 5.1% in August supports rate hold. Technicals: Daily RSI 31 (oversold), four-hour 44 (recovery hint), MACD up-cross; volumes down 82% to $85.8M turnover, cautious stance. Read more Chile's Market Yesterday The IPSA rose 0.33% to 9,146.80 points on September 23, 2025, with CLP 197 billion average turnover, revealing deeper shifts via quiet rally. Financials led, with Banco de Chile +2.8%; miners lagged on copper near $4.50/pound. The peso strengthened to 948.59 per USD, below 50/100-day MAs but with 14-day RSI at 41 hinting further gains, support at rising trendline ~945; $15M outflow from peso-hedged ETFs seeks higher returns. Steady copper exports and 4.75% policy rate amid Fed signals support, with global liquidity up (NDQ 100.33, DXY 97.23). Read more Commodities Brazilian Real The Brazilian real surged to R$5.2821 per dollar on September 23, 2025, its strongest in four months with a 2.4% monthly gain, driven by the Trump-Lula detente easing trade war tensions and unlocking bilateral commerce prospects. The currency has gained over 15% year-to-date alongside the Ibovespa's five-year highs, supported by 15% Selic creating a wide gap vs. U.S. 4.25%, strong commodities like iron ore/oil/ag products, and central bank credibility amid 5.1% inflation above 3% target. A stronger real curbs fuel/food import costs but pressures exporters; July growth contracted 0.5% for third month. Technicals: Broke September resistance near R$5.44, forecasting R$5.34 year-end if diplomacy holds; risks from failed barrier reductions could renew protectionism. Read more Cryptocurrencies Bitcoin steadied at $112,656 on September 23, 2025, down 0.06% overnight with $799.96 million volumes, resilient post-Tuesday's $1.7 billion liquidation massacre erasing $162 billion market value via 407,000 traders' overleveraged collapses triggered by Wintermute's Binance risk closures. Market cap inferred ~$2 trillion at 57% dominance; ETFs saw $563 million outflows as institutions profited, though weekly Ethereum inflows hit $1.12 billion on smart contract appeal. Bitcoin tests $111,000 support after $117,000 resistance fail, key $115,000 ahead; RSI neutral. U.S. data today sways flows, with Brazil fintech eyeing institutional trends amid domestic slowdown. Altcoins: Ethereum firm at $4,173 (resistance $4,500), Solana -3.28% to $209.89 on speculation unwind, XRP -0.27% to $2.86; smaller coins gained as shelters. DeFi locked $544 billion, USDC +9.9% to $73.1 billion; September's historical weakness persists on regulation/economic woes. Read more Companies and Market Industry Outlook Brazil's commodity-driven economy faces challenges from 15% Selic rates, lingering U.S. sanction/tariff risks despite detente, and corporate dilutions like Cosan's R$10 billion raise halving debt for ethanol/rail/gas expansions. Selic forecasts to 12.25% by 2026 offer loan relief, but 4.83% core inflation (Dec 2025)/4.29% (2026) above 3% demands gradual cuts to sustain recovery. Trump-Lula thaw bolsters aerospace/tourism via diversification to China/Argentina, supporting agribusiness/energy amid $40 billion exporter credit. Today's FGV Confidence (7:00 AM BRT), U.S. housing/oil (8:30-10:30 AM BRT), and German Ifo (04:00 AM BRT) shape consumer/energy/industrial outlooks; Daly's speech (16:10 PM BRT) may aid easing, but political storms linger. Key Developments Energy Expansion: Alupar's Regional Push – Alupar secured four Peruvian transmission projects ($220M) plus August's five ($441M) for substations serving 4M in Lima/Ica/Ayacucho, totaling ~$950M investments through 2029. Launched 724km Amazon-Roraima line (R$561.7M annual revenue), integrating Roraima to national grid, ending diesel/Venezuelan reliance after 1,090-day rainforest build. Guarantees $136.8M yearly ($31.8M Peru) at 14.5% ROI via 30-year concessions; highlights private dominance (Brazil 90% ownership, Peru 45%) filling infrastructure gaps, enhancing security/renewables. Read more Aerospace Boost: LATAM's Order – LATAM's $2.1B firm order for 24+50 Embraer E195-E2 jets enables 35 new South American routes with 30% fuel/emissions savings, driving Embraer's 50% share and travel rebound. Selic Turning Point – Forecasts to 12.25% by 2026 signal business relief, but disinflation needed amid 5.1% inflation/cooled spending.

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