Brazil's Financial Morning Call For February 10, 2026

(MENAFN- The Rio Times) Today's Focus

The Big Picture: The Dow set another all-time high above 50,100 on Monday, gaining a modest 20 points (+0.04%) as the S&P 500 advanced 0.47% to 6,965 - within striking distance of its own record - and the Nasdaq surged 0.90%. Tech led the rally, extending momentum from Friday's rebound, while software stocks remained under pressure after Anthropic's AI automation tools rattled the sector.

Brazil's Ibovespa rose 0.62% on Monday to approximately 184,077, extending its advance toward the all-time high of 186,450 reached on January 29. The real strengthened further to 5.19 per dollar - its strongest level since May 2024 - as the Copom's rate-cut signal and record foreign inflows continue to underpin the currency.

The week's Focus survey showed 2026 IPCA expectations falling for a fifth straight week to 3.97%, reinforcing the case for a March rate cut. GDP growth expectations remain stuck at a sluggish 1.80%, reflecting the toll of the Selic held at a nearly 20-year high of 15.00%.

Gold surged past $5,000 for the first time in over a week, trading above $5,060, driven by a weaker dollar and China's 15th consecutive month of central bank gold purchases. Silver recovered to approximately $82, continuing its volatile rebound from the historic late-January crash.

Latin American divergence continues: Brazil announced its first dollar bond sale of 2026, signaling confidence. Argentina's MERVAL was flat at ~2,978,000 as markets await Tuesday's inflation release - a critical test for Milei's credibility after the INDEC crisis. Mexico's IPC edged up 0.35%. Colombia's COLCAP added 0.29%.

Session Outlook: The data deluge begins: delayed U.S. January nonfarm payrolls arrive Wednesday (consensus ~70,000), followed by CPI on Thursday. Brazil's IPCA inflation print is expected around Wednesday. A benign trifecta of data would cement the rate-cut timeline for both the Fed and BCB, and likely propel the Ibovespa to new all-time highs. Brent crude trades near $69 after rising on continued U.S.–Iran uncertainty; the U.S. warned American-flagged ships to avoid Iranian waters in the Strait of Hormuz even as talks are set to continue. Earnings season slows but Coca-Cola (Tuesday) and Ford (after the close) report. Market Snapshot Brazil - February 10, 2026

Indicator	Value	Change
Ibovespa	~184,077	+0.62%
USD/BRL	5.1931	-0.47%
Selic Rate	15.00%	MARCH CUT PRICED
Brent Crude	$68.98/bbl	+1.37%
Gold	$5,066/oz	+2.0%
Silver	~$82/oz	+5.0%
Iron Ore	~$100/t	-8% mo
Coffee (Arabica)	~300 USd/Lbs	+2.8%

Today's Main Event Inflation expectations drop for fifth straight week - March cut in play

Monday's Focus survey delivered the strongest signal yet that the Copom's March 17–18 meeting will produce the first Selic cut. The median 2026 IPCA forecast fell for a fifth consecutive week to 3.97% - edging closer to the BCB's 3.0% target and well within the 1.5–4.5% tolerance band.

The market consensus for the year-end Selic holds firm at 12.25%, implying roughly 275 basis points of cuts over the remainder of 2026. The real has stabilized near R$5.19–5.22, its strongest sustained level since May 2024, for 17 weeks running - a sign that markets have largely priced in both the tight monetary stance and the expected easing path.

The disinflationary trend is real: São Paulo consumer prices rose just 0.21% MoM in January, down from 0.32% in December. Brazil's annual inflation closed 2025 at 4.26% - within target - and the trajectory into 2026 continues to improve. The IPCA-15 reading in late January showed annual inflation ticking up to 4.5%, but under the surface the data was less concerning than the headline suggested.

The January IPCA print - expected around Wednesday - is the final gatekeeper. A reading in line with or below consensus would make the March cut virtually certain and likely push the Ibovespa past its January 29 all-time high of 186,450. An upside surprise would force a repricing toward May.

Meanwhile, Brazil announced its first dollar bond sale of 2026, underscoring sovereign confidence. Foreign inflows hit R$26.3 billion in January - a record - and continue to provide structural demand for Brazilian assets.

Verdict

Five straight weeks of declining inflation expectations have turned the March cut from a possibility into a base case. The 50bp cut is now the market's central scenario. The Focus survey's 3.97% IPCA forecast - below 4% for the first time in weeks - gives the Copom cover to move. But the BCB has been burned before: the IPCA print this week is the last test before the market fully commits to March.

Geopolitics & Oil Strait of Hormuz warning raises stakes as talks continue

Brent crude rebounded to $68.98 on Monday (+1.37%), recovering from Friday's dip as a fresh U.S. warning to American-flagged ships to avoid Iranian waters in the Strait of Hormuz injected new risk premium into the market.

The advisory came even as both sides described last week's Oman talks as positive and agreed to continue negotiations. Trump called the discussions "very good," while Tehran described them as a "step forward" - but Iran continues to insist on maintaining uranium enrichment, the core U.S. demand.

A second front opened on oil flows: Trump announced that India agreed to stop buying Russian crude as part of a trade deal, though New Delhi has yet to officially confirm, emphasizing energy security remains a priority. India is one of Russia's largest crude buyers, and any halt could significantly support prices.

For Petrobras, the slightly firmer oil environment is modestly supportive. PETR4 traded around R$37 on Monday. The Foz do Amazonas exploratory drilling authorization remains the bigger long-term story. Investors also await OPEC+ and IEA reports later this week for guidance on the supply outlook.

Verdict

The Strait of Hormuz warning contradicts the diplomatic optimism and reintroduces a geopolitical premium that had been fading. The India–Russia oil question adds another wildcard. Oil is now torn between easing diplomatic tensions (bearish) and new supply-chain risks (bullish). Expect Brent to remain in the $65–72 range unless talks collapse or the India commitment materializes.

Commodities Update Gold breaks $5,000, iron ore sags, coffee near 6-month lows

Gold surged past $5,000 on Monday, trading above $5,066 - a level not seen in over a week - supported by a weaker dollar, softer inflation expectations, and China's 15th consecutive month of PBOC gold purchases. Goldman Sachs maintains its $5,400 year-end target, while UBS sees $6,200 before a pullback to $5,900. The metal is firmly in the mid-to-late stage of its bull market.

Silver continued its volatile recovery, climbing approximately 5% to around $82 as traders bought the dip from the historic late-January selloff. Despite the rebound, silver has erased all its 2026 gains since the record $121 on January 29. Higher margin requirements and the Kevin Warsh Fed chair nomination triggered the collapse; thin liquidity continues to fuel extreme swings.

Iron ore held near $100/t but remains under pressure, hovering near eight-week lows as Chinese demand cools ahead of the Lunar New Year. Port inventories in China hit a record 171.4 million tons. Supply pressure mounts from major exporters: Vale delivered record volumes in 2025, and Australia's Port Hedland resumed operations after cyclone warnings lifted.

Arabica coffee futures traded near $300/lb - close to six-month lows - pressured by forecasts for a record Brazilian crop. CONAB projects 2026 production growing 17.2% to 66.2 million bags. However, Monday saw a 2.8% rebound as the strengthening real discouraged Brazilian export sales and Colombia reported a 34% YoY drop in January output.

Economic Calendar Week of February 10

Date / Time (BRT)	Event	Importance
Tue, Feb 10	Argentina CPI (January)	HIGH
Wed, Feb 11	U.S. Nonfarm Payrolls (January, delayed)	HIGH
Wed, Feb 11	Brazil IPCA Inflation (January)	HIGH
Thu, Feb 12	U.S. CPI (January, delayed)	HIGH
Thu, Feb 12	OPEC+ Monthly Report	MEDIUM
Thu, Feb 13	UK Q4 GDP (Preliminary)	MEDIUM
Ongoing	U.S.–Iran Nuclear Talks (Continuation)	MEDIUM

Technical Analysis Key levels

Instrument	Support	Current	Resistance
Ibovespa	182,000 / 180,000	~184,077	186,450 / 190,000
USD/BRL	5.10 / 5.00	5.1931	5.27 / 5.40
Brent Crude	$65 / $60	$68.98	$70 / $72
Gold	$4,900 / $4,700	$5,066	$5,200 / $5,400

Latin America Markets February 10, 2026

Country	Index	Level	Change	FX (USD)
Brazil	Ibovespa	184,077	+0.62%	5.19
Mexico	IPC	~71,059	+0.35%	17.20
Argentina	MERVAL	~2,977,883	FLAT	1,470
Colombia	COLCAP	~2,377	+0.29%	3,645
Chile	IPSA	~11,249	+0.34%	856

Mexico: The IPC edged up 0.35% on Monday in quiet trading. Banxico 's hawkish hold at 7.00% continues to support the peso near 17.20. BBVA's upgraded year-end IPC target of 76,250 reflects improving earnings momentum. Markets await the next inflation print for clues on whether Banxico's pause extends.

Argentina: The MERVAL was essentially flat at ~2,978,000 as investors held positions ahead of Tuesday's January CPI release - the most scrutinized in months given the INDEC crisis over CPI methodology. The index remains 9.7% below its January 28 all-time high of 3,296,502. Country risk at 516 bps. The IMF review adds another layer of scrutiny to Milei's program.

Colombia: COLCAP added 0.29% in a modest recovery session. Markets are looking ahead to the central bank's next rate decision, with the easing cycle expected to continue after the recent pause.

Chile: The IPSA rose 0.34% to ~11,249 as the copper-fueled rally continued. The peso held firm at 856 per dollar. Inflation falling below the BCCh's 3% target for the first time since 2021 keeps the door open for further rate cuts. Peru's S&P/BVL jumped 2.2% ahead of its rate decision on Thursday.

Key Themes This Week

Triple Data Test

U.S. nonfarm payrolls (Wed), Brazil IPCA (Wed), and U.S. CPI (Thu) land in a three-day window. The combination could reset rate expectations across both the Fed and BCB - and drive the next leg in USD/BRL and the Ibovespa's push to new highs.

March Cut Locked In?

Focus survey shows 3.97% IPCA for 2026 - below 4% for the first time. Market prices 50bp cut at March 17–18 Copom as the base case. Year-end Selic consensus: 12.25%. The IPCA print is the final gatekeeper.

Gold Breakout

Gold back above $5,000 on PBOC buying, softer dollar, and safe-haven demand. Goldman targets $5,400; UBS sees $6,200 before pullback. The metal's bull market enters its next phase - but 5–8% drawdowns are now expected.

Argentina CPI Test

Tuesday's inflation release is the first since the INDEC chief resigned over CPI methodology. A credible number could stabilize the MERVAL; any hint of manipulation would deepen the selloff. Country risk at 516 bps. Bottom Line

This is the week that could confirm Brazil's rate-cutting cycle. The Focus survey's fifth straight decline in inflation expectations - now at 3.97% - has turned the March Copom meeting from a possibility into a base case. But the IPCA print on Wednesday remains the final gatekeeper. A benign reading would cement the 50bp cut narrative, likely push the Ibovespa past its all-time high of 186,450, and drive the real toward 5.10.

The same day brings the delayed U.S. nonfarm payrolls, followed by CPI Thursday - creating a 48-hour data gauntlet that could reset global rate expectations. U.S. futures are steady near records: the Dow above 50,000, the S&P 500 within 1% of its all-time high, and the Nasdaq rallying on tech momentum despite the software sector rout.

Regional context: Brazil's exceptionalism within Latin America deepens. The Ibovespa is up ~14% year-to-date with record foreign inflows and a strengthening real. Argentina faces its most critical CPI release in months after the INDEC crisis - the MERVAL remains 9.7% below its January peak. Mexico benefits from Banxico's hawkish stance and peso resilience. Chile extends its copper-fueled advance. The divergence within the region is the widest in years.

Key risks: IPCA upside surprise (delays rate cuts, stalls Ibovespa); weak U.S. payrolls reinforcing recession fears (risk-off for EM); hot U.S. CPI (Fed repricing, dollar strength); Argentina CPI credibility crisis (EM sentiment contagion); Strait of Hormuz escalation (oil spike); India–Russia oil disruption; iron ore breakdown below $95 (Vale headwind); silver volatility spillover; Carnival shutdown Feb 16–17 reduces liquidity.

Brazil's Rate-Cut Moment Arrives: The pieces are aligned. Inflation expectations below 4%. The real at nine-month highs. Record foreign inflows of R$26.3B in January. The Copom has signaled the turn. What remains is the data confirmation: IPCA on Wednesday will determine whether March becomes the first cut - and whether the Ibovespa breaks to new all-time highs. XP's year-end Ibovespa target remains 190,000 (optimistic: 235,000). Carnival arrives in six days - positioning ahead of the holiday could amplify any data-driven moves. Support at 182,000–183,000 is the floor for pullbacks.

Previously: Brazil Financial Morning Call - February 7, 2026. Check back Wednesday for continued coverage.

© 2026 RT Staff Reporters | Brazil Financial Morning Call

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