Brazil's Morning Call For Monday, March 30, 2026

(MENAFN- The Rio Times) TODAY'S FOCUS The Dow Joins the Correction Club

Today's Brazil's Financial Morning Call opens the last week of the war's first month with all three major US indices now in or near correction territory. This is part of The Rio Times' daily Brazil Financial Morning Call, covering Latin American financial markets.

Friday's rout was devastating for Wall Street: the Dow crashed 793 points into correction, the S&P 500 hit a seven-month low at 6,369, and the Nasdaq plunged 2.15% - now 13% off its highs. Brent topped $112 as the Strait of Hormuz remained closed. But Brazil held: the Ibovespa slipped just 0.64% to 181,557, outperforming by 100 basis points. The decoupling is no longer a thesis - it's a trend.

Monday's anchor is Fed Chair Powell speaking at 10:30 ET - his first comments since the hawkish March hold, now set against a Dow in correction and Brent above $110. The BCB Focus Survey at 07:25 BRT, German CPI, EU confidence data, and China PMI overnight all feed into a session where the macro picture could shift. Trump extended the Iran deadline by 10 days to April 6, buying time but not clarity.

Three Things That Matter

Friday	S&P 500 −1.67% to 6,369 (7-month low, 5th straight losing week). Dow −793 pts to 45,167 (entered correction). Nasdaq −2.15% to 20,948 (−13% from highs). Ibovespa −0.64% to 181,557 - massive outperformance. Brent above $112. WTI topped $100. 10Y surged to 4.46% (highest since July). Gold +0.79% to $4,529. Silver +1.06% to $70.52. Trump extended Iran deadline 10 days to Apr 6. Mag 7 lost $330B+ in market cap. IPC −0.56%, COLCAP −0.93%, MERVAL +0.88%, IPSA +0.19%
Weekend	War Day 30 - one month since first strikes. Hormuz still closed. Trump gave until Apr 6. Iran reviewing 15-point proposal but no breakthrough. US deployed additional troops. Spanish CPI surged to 3.6% (from 2.3%) - European inflation pass-through confirmed. Philly Fed's Paulson flagged inflation concerns. BofA: markets pricing "hawkish Fed reaction function"
Today	BCB Focus Survey (07:25 BRT). German CPI (08:00 ET, cons: 1.1% MoM). EU Business/Consumer Survey (05:00 ET). FED CHAIR POWELL SPEAKS (10:30 ET) - first post-meeting comments with Dow in correction. Dallas Fed Mfg (10:30 ET). FOMC Williams (16:00 ET). China Manufacturing PMI (overnight, cons: 50.2). War Day 31. Q1 ends Tuesday

Where We Left Off FRIDAY, MAR 27 - B3 CLOSE

The Ibovespa opened at 182,733 and drifted lower to close at 181,556.76 (−0.64%), touching 180,976 intraday. The modest decline contrasted sharply with the carnage in New York, where the Dow lost nearly 800 points. Brazil's relative resilience - losing just 0.64% vs. 1.73% for the Dow - extends the week's decoupling pattern.

The S&P 500 cratered 1.67% to 6,368.85 - its lowest since August and a fifth consecutive weekly loss, the longest such streak since 2022. The Nasdaq fell 2.15% to 20,948, now 13% below its October highs. The Dow shed 793 points and entered correction territory at 45,167. The Magnificent Seven lost over $330 billion in market cap on Friday alone.

Brent surged past $112 and WTI topped $100 as Hormuz incidents continued. The 10-year yield hit 4.46%, its highest since July, as BofA noted markets are now pricing a "hawkish Fed reaction function" and a "broader commodity shock." Gold rose 0.79% to $4,529 and silver gained 1.06% to $70.52 - the safe-haven rotation deepened.

Trump extended the Iran strike deadline by 10 days to April 6, giving diplomacy more time but also prolonging uncertainty. As covered in Friday's Morning Call, the Ibovespa's weekly performance (+3.0% Mon-Fri) while the S&P 500 lost 2.1% is the widest weekly spread since the war began.

Market Snapshot DATA AS OF FRI, MAR 27 CLOSE

Indicator	Close	Change
Ibovespa	181,557	−0.64%
USD/BRL	R$5.24	~flat
S&P 500	6,369	−1.67%
Nasdaq	20,948	−2.15%
10Y Treasury	4.46%	+4 bps
Gold (Spot)	$4,529	+0.79%
Brent Crude	~$112	+3.7%
Iron Ore (62%)	~$102	~flat
DXY	~99.5	+0.3%

What to Watch MONDAY CATALYSTS

Fed Chair Powell speaks at 10:30 ET - the most important Fedspeak since the March 18 hold. He faces an impossible question: acknowledge the Dow correction and oil-driven growth risk (dovish), or maintain the hawkish inflation stance with Brent above $110 (hawkish). Any hint of rate cut consideration would send equities surging; doubling down on "higher for longer" likely deepens the correction.

The BCB Focus Survey at 07:25 BRT is the pre-open domestic read. After last week's IPCA-15 at 3.74%, the survey should confirm anchored expectations - but with Brent back above $110, any uptick in IPCA 2026 forecasts toward 4.5% would be a warning sign. German CPI at 08:00 ET (cons: 1.1% MoM) follows Spain's 3.6% shock and will shape ECB expectations.

EU Business and Consumer Surveys at 05:00 ET (cons: 96.5, prev: 98.3) will show whether European confidence is cracking under the energy shock. Dallas Fed Manufacturing at 10:30 ET captures the oil patch's response to $100+ crude. China Manufacturing PMI overnight (cons: 50.2, prev: 49.0) sets the Asia tone. Q1 ends tomorrow - expect window-dressing flows.

Ibovespa Setup TECHNICAL LEVELS

The Ibovespa closed at 181,556.76 (−0.64%). RSI fell to 49.39 (MA: 47.88) - slipping just below 50 after three days above it. The MACD histogram narrowed to 35.49 (MACD: −116.64, signal: −152.13), still positive but fading. The index ended the week at 181,557 vs. 176,219 a week earlier - a net gain of 3.0%.

Resistance: 181,977 (upper SMA cluster) → 182,276 (upper Bollinger zone) → 183,831 (mid-March swing) → 185,424 (Wednesday's high).

Support: 181,188 (intermediate SMA) → 180,720 (50-day area) → 177,194 (lower SMA) → 175,871 (lower Bollinger) → 154,904 (200-day).

The RSI dipping below 50 is a yellow flag but not a breakdown - it reflects two days of pullback after a five-day, 5.2% surge. If Powell's tone is less hawkish than expected, the index could reclaim 50 RSI and test 182,000+ immediately. If he's hawkish and oil stays above $110, the test of the 50-day SMA at ~180,720 becomes likely.

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

The May Copom decision hinges on two variables: where Brent is trading and whether inflation expectations remain anchored. Last week's IPCA-15 at 3.74% was encouraging, and the BCB Inflation Report showed manageable scenarios. But with Brent back above $112, the war-driven inflation pass-through risk is re-escalating.

Today's Focus Survey will reveal whether the market has begun to price higher IPCA for 2026. If expectations hold near 4.10%, the May 25 bps cut to 14.50% remains the base case. If they tick toward 4.30-4.50%, the DI curve reprices and rate-sensitive stocks give back gains. Powell's speech matters here too - a hawkish Fed constrains the BCB's room to deviate from global policy.

Economic Calendar MONDAY, MAR 30

Time	Event	Impact
07:25 BRT	BCB Focus Survey - IPCA 2026 expectations after IPCA-15. If holds near 4.10%, May cut intact. Watch Selic terminal rate and GDP revisions	HIGH
05:00-08:00 ET	EU Business/Consumer Survey (05:00, cons: 96.5). German regional CPIs (04:00+). German CPI (08:00 ET, cons: 1.1% MoM). After Spain's 3.6% CPI shock, European inflation in focus	HIGH
10:30 ET	FED CHAIR POWELL SPEAKS - First comments since March hold. Dow in correction, Brent $112, 10Y at 4.46%. Tone will define week. Dallas Fed Mfg Index (same time)	HIGH
16:00 ET	FOMC Williams speaks. China Mfg PMI overnight (cons: 50.2, prev: 49.0). Q1 ends tomorrow - window-dressing flows. War Day 31	MEDIUM

Latin America Markets FRIDAY CLOSE

Index	Close	Change	RSI (14)	Signal
Ibovespa	181,557	−0.64%	49.39	Neutral
IPC (Mexico)	66,686	−0.56%	46.64	Neutral
COLCAP (Colombia)	2,213	−0.93%	45.32	Neutral
IPSA (Chile)	10,417	+0.19%	44.65	Neutral
MERVAL (Argentina)	2,793,846	+0.88%	52.89	Neutral

Friday's LatAm session was split. Argentina's MERVAL (+0.88%) and Chile's IPSA (+0.19%) managed gains, while Brazil (−0.64%), Mexico (−0.56%) and Colombia (−0.93%) dipped. The key takeaway: all five LatAm indices dramatically outperformed the S&P 500's −1.67% and the Dow's −1.73%. The region's average decline of ~0.2% vs. Wall Street's ~1.8% is the widest spread of the war.

As tracked in our Ibovespa market reports, all LatAm RSI readings remain in the 44-53 neutral zone - no index is overbought or oversold. This balanced positioning suggests the region can absorb further US weakness without panic selling.

Commodities & FX KEY MOVES

Brent surged above $112 on Friday, its highest close since the Monday before Trump's 5-day pause. Hormuz incidents continued with no tanker traffic resuming. Trump extended the deadline to April 6 but also deployed more troops, sending mixed signals. Carnival cut its FY earnings guidance citing $90+ Brent assumptions through Q2.

Gold rose 0.79% to $4,529 and silver gained 1.06% to $70.52. Both precious metals posted weekly gains despite the broader commodity carnage. Gold's RSI at 39.00 (MA: 38.09) is stabilizing at depressed levels, suggesting the worst of the forced liquidation is over. The safe-haven bid is returning as the Dow enters correction.

USD/BRL was essentially flat at R$5.24. The real's stability while the DXY strengthened and global risk assets crashed is remarkable - the 14.75% carry and the IPCA-15 disinflation are providing genuine support. Bitcoin fell to $67,388, underperforming risk assets as crypto struggles for a war-period narrative.

DXY rose to ~99.5 and the 10-year yield hit 4.46% - the highest since July. The Schwab note that average S&P 500 member drawdown is 17% (vs. 7% for the index) reveals the true depth of the correction beneath the surface. Tech forward P/E has collapsed from 31.7 to 20.2 in five months - the fastest multiple compression since 2022.

Risk Map BULL vs BEAR

Bull Case

Bear Case

Powell could pivot - the Dow in correction changes the calculus - The Fed has never ignored a broad equity correction for long. If Powell acknowledges growth risks from oil alongside inflation, the market will price at least one cut and the selloff reverses. Even a neutral tone would be a relief. Brazil's decoupling is now statistically significant - The Ibovespa gained 3.0% last week while the S&P 500 lost 2.1%. The 14.75% carry, the IPCA-15 at 3.74%, and Petrobras's oil-driven earnings make Brazil a fundamentally different bet from US tech-heavy indices. The April 6 deadline creates a 10-day window for diplomacy - Trump's extension gives markets a defined calm period. If negotiations progress through Pakistan, the off-ramp remains available without requiring military escalation. Q1 window-dressing may support equities on Monday/Tuesday - Fund managers with rebalancing mandates may buy into Friday's dip to improve quarter-end marks. This technical flow can support a Monday bounce.

All three US indices are in or near correction - the trend is down - Dow in correction. Nasdaq −13%. S&P 500 at seven-month lows on a fifth losing week. The average S&P 500 member is down 17%. This is not a dip - it's a structural repricing of growth and inflation expectations. Brent above $112 with 10Y at 4.46% is a stagflation cocktail - Rising oil + rising yields + falling equities is the 2022 playbook. If this pattern persists, the BCB's easing cycle is at risk regardless of the IPCA-15 and Brazil cannot escape the macro gravity indefinitely. Spanish CPI at 3.6% proves the European inflation pass-through is real - This will feed into ECB expectations and raise global rates. If German CPI confirms the trend today, European equities join the correction and the global risk-off intensifies. One month of war with no resolution in sight - The Strait of Hormuz has been closed for 30 days. Oil infrastructure damage is accumulating. The longer the war lasts, the more permanent the supply disruption becomes - and the harder it is for oil to fall even with a ceasefire.

Positioning BOTTOM LINE

Monday is Powell's session. Everything else - the Focus Survey, German CPI, Dallas Fed - is context. If Powell signals any flexibility on the rate path, the oversold US market bounces hard and Brazil rides the wave. If he stays hawkish, the correction deepens and tests whether Brazil's decoupling can survive a full-blown US equity bear market.

The Ibovespa's weekly +3.0% outperformance vs. the S&P 500's −2.1% is the trade of the war. The domestic catalysts - IPCA-15 at 3.74%, Copom cut, 14.75% carry - are real and data-backed. The question for Q2 is whether these supports can hold against $112 Brent and 4.46% US yields.

For Q1 end positioning: maintain overweight Brazil vs. US. The carry, the disinflation trend, and the commodity exposure create a structural bid that the US tech correction does not share. Petrobras and oil names remain hedges against further Brent upside. Rate-sensitive plays (builders, banks) are conditional on the Focus Survey and Powell's tone.

One month of war. The market has learned its rhythms: hope trades get faded, escalation gets bought on the dip, and Brazil outperforms in both directions. The April 6 deadline is the next binary event. Until then, Powell sets the tone.

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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