Brazil's Morning Call For Friday, March 20, 2026

(MENAFN- The Rio Times) TODAY'S FOCUS Brazil Stands Alone

Today's Brazil's Financial Morning Call opens a remarkable week-end session. This is part of The Rio Times' daily Brazil Financial Morning Call, covering Latin American financial markets.

Thursday delivered the most stunning intraday reversal of the war period. The Ibovespa opened down nearly 2% - gapping to 176,296 on the Dow's 768-point crash and Powell's hawkish press conference - then staged a relentless recovery to close at 180,270.62 (+0.35%). A 4,000-point swing from low to close, fueled by the Copom's first cut in two years and the high-carry trade that makes Brazil irresistible even at 14.75%.

Wall Street couldn't match the bounce. The S&P 500 fell 0.27% to 6,606 - briefly breaking below its 200-day SMA for the first time since May - before paring losses late. The Dow lost another 204 points. Markets are now pricing zero Fed cuts for 2026, and Macquarie openly called for the next Fed move to be a hike.

The oil market went haywire. Brent surged to $119 intraday after attacks on Iranian and Qatari energy infrastructure, before collapsing to settle at $108.65 after Israeli PM Netanyahu said Israel is helping the US reopen the Strait of Hormuz. Gold crashed - down ~10% week-to-date, its worst week since 1983 - as rising real yields and dollar strength crushed the safe-haven metal.

The message from Thursday is clear: Brazil's domestic story - the Copom cut, the carry trade, the R$45 billion in foreign flows - is powerful enough to decouple from a global selloff, at least temporarily. The question for Friday is whether this resilience holds into the weekend, or whether profit-taking and geopolitical risk heading into two closed days pull the index back down.

Three Things That Matter

Wednesday	SUPER WEDNESDAY: Ibovespa −0.43% to 179,640. PPI shocked +0.7% MoM. Fed held, dot plot kept 1 cut, Powell hawkish. Dow −768 pts to 46,225 (new 2026 low). Copom cut 25 bps to 14.75%, unanimous, open guidance. BCB raised inflation to 3.9%. Brent ~$104. Gold broke $5,000
Thursday	Ibovespa REVERSED: gapped to 176,296 (−2%) then rallied to close 180,271 (+0.35%). USD/BRL R$5.21 (−0.6%). S&P −0.27% to 6,606 (broke below 200-day SMA intraday). Dow −204 to 46,021. Brent hit $119 intraday, settled $108.65. Gold crashed (~10% WTD, worst since 1983). ECB held 2.15%. BoE held 3.75%. Netanyahu: Israel helping reopen Hormuz. Zero Fed cuts priced for 2026
Today	Week-end positioning. Light calendar: Baker Hughes Rig Count (13:00 ET). Argentina GDP Q4 (15:00 ET, cons: +2.2% YoY). CFTC positioning data (16:30 ET). German PPI came in deflationary (−0.5% MoM). Euro Summit continues. Japan holiday (Vernal Equinox). War Day 21 - weekend risk premium in play

Where We Left Off THURSDAY, MAR 19 - B3 CLOSE

The Ibovespa delivered the session of the war. It opened at 179,624, immediately gapped down to 176,296 - within striking distance of the 200-day SMA at ~174,809 - as global markets digested Powell's hawkish press conference and the Dow's 768-point crash.

Then the buying began. The Copom's 25 bps cut, confirmed after the close Wednesday, gave domestic investors a reason to buy the dip. The index climbed steadily through the session, reaching 181,251 before settling at 180,270.62 (+0.35%). A 4,000-point low-to-close reversal - the largest positive swing since the war began.

In New York, the recovery was far weaker. The S&P 500 fell 0.27% to 6,606 after briefly breaking below its 200-day SMA at 6,619 for the first time since May. The Dow dropped 204 points to 46,021. The Nasdaq shed 0.28% to 22,091. Markets pared the worst of the losses after Netanyahu said Israel is helping the US reopen the Strait of Hormuz.

Oil was wildly volatile. Brent spiked to $119 intraday after attacks on Iranian and Qatari energy infrastructure, including Qatar's LNG facilities. It then collapsed to settle at $108.65 - still the highest close since July 2022. As covered in yesterday's Morning Call, the market is now pricing zero Fed cuts for 2026, with Macquarie calling for the next move to be a hike in 1H27.

Market Snapshot DATA AS OF THU, MAR 19 CLOSE

Indicator	Close	Change
Ibovespa	180,271	+0.35%
USD/BRL	R$5.21	−0.57%
S&P 500	6,606	−0.27%
Nasdaq	22,091	−0.28%
10Y Treasury	~4.28%	+6 bps
Gold (Spot)	~$4,682	−1.85%
Brent Crude	$108.65	+1.2%
Iron Ore (62%)	~$102	~flat
DXY	~99.0	−1.0%

What to Watch FRIDAY CATALYSTS

Friday is a light-calendar day with heavy positioning dynamics. The main event is the weekend itself - traders must decide whether to hold positions through two days of potential war headlines with Brent at $109 and the S&P below its 200-day SMA.

The Baker Hughes Rig Count at 13:00 ET (prev: 412 oil rigs) shows how US producers are responding to $100+ oil. A significant increase would signal supply response and be modestly bearish for crude. Argentina Q4 GDP at 15:00 ET (cons: +2.2% YoY) is a milestone for the Milei reform story.

CFTC positioning data at 16:30 ET will reveal speculative bets on oil, gold, and BRL - all markets that saw extreme moves this week. German PPI came in deflationary (−0.5% MoM vs +0.3% cons), signaling weak European demand that contrasts with the US inflation surge. Japan is closed for Vernal Equinox.

War Day 21. Netanyahu's statement about helping reopen Hormuz is the most concrete de-escalation signal from Israel since the conflict began. If weekend headlines confirm progress, Monday opens with a relief rally. If the war escalates further - particularly against Qatari LNG infrastructure - Brent could gap to $120+ and the global selloff resumes.

Ibovespa Setup TECHNICAL LEVELS

The Ibovespa closed Thursday at 180,270.62 (+0.35%). Daily RSI reads 46.62 (MA: 47.83) - neutral and rising after the reversal. The MACD histogram remains negative at −962.65 (MACD: 373.19, signal: −589.46), but the histogram is narrowing - the first sign of potential trend exhaustion in the selloff.

Resistance: 180,607 (upper SMA cluster) → 181,005 (recent swing high) → 181,251 (Thursday's high) → 183,245 (upper Bollinger).

Support: 179,741 (intermediate SMA) → 176,419 (lower Bollinger) → 174,809 (200-day SMA) → 153,548 (long-term SMA).

Thursday's low of 176,296 marked the war-period low for the Ibovespa - just 1,487 points above the 200-day SMA at ~174,809. The fact that it bounced 4,000 points from that level confirms massive buy-the-dip demand near the 200-day.

Friday's bias depends on Wall Street's tone. If S&P futures hold above 6,600, the Ibovespa consolidates 179,500–181,000. If the US sells off into the weekend (profit-taking, war premium), the Ibovespa tests 178,000. A close above 181,000 would signal the Copom rally has legs into next week.

Copom Watch SELIC AT 14.75% · NEXT MEETING: MAY 6-7

The BCB cut 25 bps to 14.75% on Wednesday, as expected. Thursday's market reaction confirmed it was well-priced: the Ibovespa's reversal was driven by the cut, not despite it.

The open guidance ("adjustments in the pace of calibration, in light of new information, are possible") gives the BCB full flexibility. The base case for May is another 25 bps to 14.50%, contingent on Brent staying near $100–110 and no further deterioration in inflation expectations.

The BCB's Monetary Policy Report at month-end will provide the full analytical framework. Watch Focus Survey revisions in the coming weeks - if IPCA 2026 expectations push above 4.5% (the ceiling), the May cut is in jeopardy.

Economic Calendar FRIDAY, MAR 20

Time	Event	Impact
All Day	Iran-US War Day 21. Week-end positioning - traders weigh weekend war risk with Brent at $109 and S&P below 200-day SMA. Netanyahu says Israel helping reopen Hormuz. Japan holiday (Vernal Equinox). Euro Summit Day 2	HIGH
08:00 ET	Mexico Aggregate Demand Q4 + Private Spending Q4. Canadian Retail Sales (08:30 ET, cons: −0.4% MoM). Light data day - positioning dominates	LOW
13:00 ET	Baker Hughes Oil Rig Count - Prev: 412. US supply response to $100+ oil. Significant increase = bearish crude signal	MEDIUM
15:00 ET	Argentina GDP Q4 - Cons: +2.2% YoY (prev: +3.3%). Milei reform story test. Also: Argentine Retail Sales (Jan, prev: +25.5%)	MEDIUM
16:30 ET	CFTC Positioning Data - Speculative positions in crude, gold, BRL, S&P 500 after the most volatile week since the war began. Key for reading institutional sentiment	MEDIUM

Latin America Markets THURSDAY CLOSE

Index	Close	Change	RSI (14)	Signal
Ibovespa	180,271	+0.35%	46.62	Neutral
IPC (Mexico)	65,199	−0.88%	34.17	Oversold
COLCAP (Colombia)	2,200	+0.97%	39.39	OS Watch
IPSA (Chile)	10,473	−1.38%	40.11	Neutral
MERVAL (Argentina)	2,768,681	+2.78%	39.20	OS Watch

Thursday revealed a clear LatAm divergence. Brazil (+0.35%) and Argentina (+2.78%) staged powerful reversals from sharply negative opens, while Mexico (−0.88%) and Chile (−1.38%) continued selling off. Colombia (+0.97%) bounced off its lows.

The IPC at RSI 34.17 is now deeply oversold - its lowest reading since the war began and approaching capitulation territory. Chile's IPSA at 10,473 (−1.38%) was the worst performer, falling sharply on regional contagion from the global selloff.

The MERVAL's +2.78% continues the Argentine short-covering rally - three consecutive green sessions totaling +6.2%. Today's Q4 GDP data (cons: +2.2%) could extend or reverse this move. The Ibovespa's 4,000-point reversal was the standout: proof that the Copom cut has fundamentally changed the domestic bid.

Commodities & FX KEY MOVES

Brent settled at $108.65 (+1.2%) - its highest close since July 2022 - after an extraordinary intraday range that saw prices spike to $119 before collapsing. Attacks on Qatari LNG facilities and Iranian energy infrastructure drove the spike. Netanyahu's Hormuz statement triggered the reversal. WTI settled at ~$96.

Gold crashed to ~$4,682, down roughly 10% week-to-date - its worst weekly performance since February 1983. The precious metal is being destroyed by rising real yields, a stronger dollar, and forced margin liquidation. Gold miners (Newmont −8.4%) were among the worst-hit equities globally.

USD/BRL fell to R$5.21 (−0.57%), strengthening despite the global risk-off as Brazil's carry trade remains powerfully attractive at 14.75% Selic. The real was one of the best-performing EM currencies on Thursday - a direct benefit of the Copom cut paradox: cutting rates signals confidence in the inflation trajectory.

DXY fell ~1.0% to ~99.0, pulling back sharply from Wednesday's 100+ level. The reversal came as markets reconsidered whether the Fed's hawkishness will hold if the economy weakens under oil pressure.

Risk Map BULL vs BEAR

Bull Case

Bear Case

The Ibovespa's 4,000-point reversal proves domestic demand is real - The index absorbed a 768-point Dow crash, a hawkish Fed, and zero rate cuts priced - and still closed green. R$45 billion in foreign flows and the Copom cut create a structural bid that global volatility cannot overcome. Netanyahu's Hormuz statement is the most concrete de-escalation signal yet - "Israel is helping the US reopen the Strait of Hormuz" is qualitatively different from Hassett's timeline or Bessent's tanker comments. If confirmed over the weekend, oil collapses to $95–100 and the entire war premium unwinds. Gold's crash means the worst of the inflation scare may be behind us - Gold falling 10% in a week during a war is extreme. It signals that the market is now pricing peak disruption. When gold stabilizes, it typically marks the turn in broader risk sentiment. The DXY reversal from 100 back to 99 eases EM pressure - The dollar's failure to hold above the 100 psychological level after the hawkish Fed suggests the rally is losing steam. A weaker dollar helps every EM market, especially Brazil.

The S&P 500 has broken below its 200-day SMA - Thursday's intraday breach of 6,619 was the first since May. The Dow hit its lowest level of the year. Macquarie is calling for a Fed hike. This is not the environment for EM equities to decouple indefinitely. Brent at $109 with $119 intraday spikes creates impossible conditions for central banks - The BCB raised inflation to 3.9%, approaching the 4.5% ceiling. If Brent stays above $100 through April, the May Copom cut is at risk and the entire easing cycle narrative collapses. The gold crash signals forced liquidation, not healthy risk repricing - Gold down 10% in a week, silver down 10% in a day - these are not orderly moves. They suggest margin calls and forced selling that could spread to other asset classes, including EM equities. Weekend risk is extreme with three weeks of war and no ceasefire - Every prior weekend since Feb 28 has produced escalation headlines. Traders holding risk into Saturday face asymmetric downside from a potential Qatari infrastructure attack, an Iranian nuclear escalation, or a US strike on oil facilities.

Positioning BOTTOM LINE

Friday's session is about one question: do you hold risk into the weekend? The Ibovespa at 180,271 just proved it can absorb a global selloff. But three weeks of war have taught us that weekends produce surprises.

The positioning call is to hold core positions but hedge the tail. Petrobras benefits from $109 Brent - keep it. PRIO benefits even more without the export tax - keep it. Reduce bank exposure into the close; they're the most vulnerable to a DI curve reprice if weekend war headlines push Brent to $120.

As tracked in our Ibovespa market reports, the 200-day SMA at ~174,809 was tested and held at 176,296. That level is now the war-period line in the sand. A close below it next week would be a medium-term trend break.

The week's lesson: Brazil can decouple from the US on domestic catalysts, but it cannot escape the war. The Copom cut bought time. The question is whether the war gives the BCB enough space to use it.

RT Staff Reporters · This newsletter is for informational purposes only and does not constitute investment advice. Always consult a licensed financial advisor before making investment decisions. Past performance does not guarantee future results.

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