Brazil's Morning Call For Tuesday, March 31, 2026

(MENAFN- The Rio Times) TODAY'S FOCUS Q1 Ends With a Whimper in New York, a Shrug in São Paulo

Today's Brazil's Financial Morning Call marks the final session of Q1 2026 - a quarter reshaped entirely by war. This is part of The Rio Times' daily Brazil Financial Morning Call, covering Latin American financial markets.

Powell delivered the best outcome the market could hope for on Monday: rates stay put, no hikes to fight oil, inflation expectations "well anchored." Treasury yields plunged 10 bps. But the S&P 500 still fell 0.39% as WTI closed above $100 for the first time since 2022. The Ibovespa gained 0.53% to 182,514. Argentina's MERVAL surged 2.57%. Brazil closed Q1 as the clear outperformer.

Tuesday is Q1's final mark. CB Consumer Confidence (10:00 ET, cons: 87.8), JOLTS (10:00 ET), EU-wide CPI flash (05:00 ET, cons: 2.6% YoY), French CPI, Chicago PMI (09:45 ET), and Colombia's rate decision (14:00 ET) create a data wall. Treasury Sec Bessent said the US will "retake control of the Straits." Trump told the FT he wants to "take the oil" in Iran. The war enters month two with markets closed Friday for Good Friday.

Three Things That Matter

Monday	S&P 500 −0.39% to 6,344 (3rd straight loss, ~9% off highs). Nasdaq −0.73% to 20,795. Dow +0.11% to 45,216. WTI +3.25% to $102.88 - first close above $100 since 2022. Brent ~$112. 10Y fell 10 bps to ~4.33% (Powell effect). VIX 30.61. Powell at Harvard: "policy in a good place," won't hike to fight oil, no systemic risks from correction. Bessent: US will "retake control of the Straits." Micron −10%. Ibovespa +0.53% to 182,514. MERVAL +2.57%. Gold +1.52% to $4,580. Silver +3.29%
Overnight	Japan Housing Starts −4.9% (worse than −4.5% cons). UK GDP +0.1% QoQ (Q4, at cons). French CPI expected to surge (1.6% YoY cons vs 0.9% prev). EU CPI flash (cons: 2.6% YoY vs 1.9% prev) - war-driven European inflation test. German unemployment stable. China Mfg PMI beat at 50.5 vs 50.2 cons. Holiday-shortened week - markets closed Friday (Good Friday)
Today	EU CPI Flash (05:00 ET, cons: 2.6% YoY). French CPI (cons: 1.6% YoY). Italian CPI. BRL Fiscal Data (07:30 BRT). BRL PPI (08:00 BRT). CAGED Jobs (13:30 BRT). Chicago PMI (09:45 ET, cons: 54.8). CB Consumer Confidence (10:00 ET, cons: 87.8). JOLTS (10:00 ET, cons: 6.89M). Colombia Rate Decision (14:00 ET, cons: 11.25%). Fed speakers: Goolsbee (12:00), Schmid (13:10), Barr (15:00), Bowman (17:10). Q1 FINAL SESSION. War Day 32

Where We Left Off MONDAY, MAR 30 - B3 CLOSE

Powell spoke, yields dropped, and stocks still fell - but not everywhere. The Ibovespa opened at 181,561 and rallied to 184,414 intraday before settling at 182,514.20 (+0.53%). The rally was broad-based with energy names leading. Brazil's domestic floor - the 14.75% carry, IPCA-15 disinflation, and May cut expectations - continues to attract capital.

Wall Street was mixed. The Dow eked out a 49-point gain (+0.11%), but the S&P 500 lost 0.39% to 6,344 and the Nasdaq dropped 0.73% to 20,795 as Micron crashed 10% and semis continued to bleed from Google's TurboQuant algorithm disruption. The S&P 500 is now 9% off its highs - one more percent to correction.

Powell's Harvard appearance was the session's defining moment. He said policy is "in a good place," won't hike to address oil-driven inflation, and saw no systemic risk from the correction. The 10Y dropped ~10 bps to 4.33%. Bond traders loved it - equity traders shrugged as WTI crossed $100 for the first time since 2022. Bessent's "retake control of the Straits" and Trump's "take the oil" comments escalated the rhetoric further.

LatAm delivered a strong session. Argentina's MERVAL surged 2.57% - the best LatAm performer - while Mexico's IPC gained 0.60% and Chile's IPSA was flat. Colombia's COLCAP dipped 0.80%. As covered in yesterday's Morning Call, Brazil's decoupling from US equities continues to widen. Gold rallied 1.52% to $4,580 and silver surged 3.29% as the safe-haven bid strengthened post-Powell.

Market Snapshot DATA AS OF MON, MAR 30 CLOSE

Indicator	Close	Change
Ibovespa	182,514	+0.53%
USD/BRL	R$5.25	~flat
S&P 500	6,344	−0.39%
Nasdaq	20,795	−0.73%
10Y Treasury	~4.33%	−10 bps
Gold (Spot)	$4,580	+1.52%
Brent Crude	~$112	+1.6%
WTI Crude	$102.88	+3.25%
DXY	~100.4	+0.39%

What to Watch TUESDAY CATALYSTS

EU CPI flash at 05:00 ET (cons: 2.6% YoY vs 1.9% prev) is the war's first comprehensive European inflation reading. After Spain's 3.6% shock, this will confirm whether the oil pass-through is broad-based or concentrated. French CPI (cons: 1.6% vs 0.9% prev) and Italian CPI round out the picture. A hot EU print pushes ECB hawks and raises global rate expectations.

CB Consumer Confidence at 10:00 ET (cons: 87.8, prev: 91.2) and JOLTS Job Openings (cons: 6.89M) are the US sentiment reads. If confidence drops below 85 - levels last seen in the pandemic - the recession drumbeat intensifies. Chicago PMI at 09:45 ET (cons: 54.8) tests manufacturing resilience. Colombia's rate decision at 14:00 ET (cons: 11.25%) is the LatAm central bank event.

Brazil's domestic data: fiscal balance and debt-to-GDP (07:30 BRT), PPI (08:00 BRT), and CAGED net payroll jobs (13:30 BRT, cons: 270K). Four Fed speakers - Goolsbee, Schmid, Barr, Bowman - will interpret Powell's dovish signal. This is Q1's last trading session - portfolio marks are final at the close.

Ibovespa Setup TECHNICAL LEVELS

The Ibovespa closed at 182,514.20 (+0.53%). RSI recovered to 51.06 (MA: 47.91) - back above 50. The MACD histogram rose to 78.83 (MACD: −53.60, signal: −132.43) - the bullish crossover is strengthening with three consecutive positive histogram readings. Volume on Monday's intraday rally to 184,414 suggests buyers are active.

Resistance: 182,514 (Monday close) → 182,316 / 182,276 (upper SMA cluster) → 183,831 (swing high) → 185,988 (upper Bollinger).

Support: 181,422 (mid-range) → 181,333 / 181,188 (SMA cluster) → 180,720 (50-day) → 177,299 (lower SMA) → 176,677 (lower Bollinger) → 155,131 (200-day).

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

Powell's refusal to hike is the best global backdrop the BCB could ask for. If the Fed holds through the oil shock and says rates are "in a good place," the BCB has cover to proceed with the May cut. The IPCA-15 at 3.74% and the Focus Survey's anchored expectations reinforce the case.

However, Brent above $112 and WTI above $100 create genuine forward-looking inflation risk. If today's EU CPI flash shows broad-based war-driven inflation, the market may begin to question whether any central bank - including the BCB - can cut into an energy shock of this magnitude. Colombia's decision at 14:00 ET (cons: 11.25% from 10.25%) will signal whether LatAm central banks are hawking up again.

Economic Calendar TUESDAY, MAR 31

Time	Event	Impact
05:00 ET	EU CPI Flash (Mar, cons: 2.6% YoY, prev: 1.9%). Core CPI (cons: 2.4%). French CPI (cons: 1.6% YoY). Italian CPI. War-driven European inflation test - shapes ECB path	HIGH
07:30-13:30 BRT	BRL Fiscal Balance + Debt/GDP (07:30 BRT). BRL PPI (08:00 BRT). Chile copper/retail data (08:00 ET). CAGED Jobs (13:30 BRT, cons: 270K). Domestic Q1 bookend	MEDIUM
09:45-10:00 ET	Chicago PMI (09:45, cons: 54.8). CB Consumer Confidence (10:00, cons: 87.8, prev: 91.2). JOLTS Job Openings (10:00, cons: 6.89M). US consumer pulse for the war period	HIGH
12:00-17:10	Fed speakers: Goolsbee (12:00), Schmid (13:10), Barr (15:00), Bowman (17:10). Colombia Rate Decision (14:00 ET, cons: 11.25%). Q1 CLOSE. War Day 32. Markets closed Friday	HIGH

Latin America Markets MONDAY CLOSE

Index	Close	Change	RSI (14)	Signal
Ibovespa	182,514	+0.53%	51.06	Bullish
IPC (Mexico)	67,088	+0.60%	48.51	Neutral
COLCAP (Colombia)	2,195	−0.80%	44.62	Neutral
IPSA (Chile)	10,418	+0.01%	44.68	Neutral
MERVAL (Argentina)	2,865,753	+2.57%	57.89	Bullish

Argentina's MERVAL is the Q1 standout, surging 2.57% on Monday with RSI at 57.89 - the highest in LatAm and the only index approaching overbought territory. Milei's reform momentum is providing a domestic bid that transcends the war noise. Brazil and Mexico posted matching gains, while Colombia lagged ahead of today's rate decision.

Commodities & FX KEY MOVES

Oil crossed a psychological threshold: WTI settled at $102.88 (+3.25%), its first close above $100 since the war began. Brent hovered near $112. Trump's FT interview - saying he wants to "take the oil" and that US forces could seize Iran's Kharg Island export hub - escalated the rhetoric to a new level. Bessent's "retake control of the Straits" language suggests operational planning, not just diplomacy.

Gold surged 1.52% to $4,580 and silver popped 3.29% to $72.39 - the best precious metals day in two weeks. Powell's dovish hold and the 10 bps drop in yields boosted non-yielding assets. Gold's RSI at 40.77 (MA: 37.94) shows recovery momentum building from deeply oversold levels.

USD/BRL held at R$5.25, utterly stable despite global volatility. RSI at 52.03 - perfectly neutral. The real is trading on its own fundamentals: 14.75% carry, disinflation, and institutional flows. Bitcoin recovered to $67,662 (+1.40%), finding a modest bid alongside the broader risk assets.

Yields were the session's biggest move. The 10Y dropped ~10 bps to 4.33% on Powell's dovish signal. The 2Y fell even more - down to 3.83%. The yield curve flattening suggests the bond market believes the Fed will eventually cut, even with oil at $100+. The VIX eased to 30.61 but remains above 30, elevated.

Risk Map BULL vs BEAR

Bull Case

Bear Case

Powell gave the best possible answer - No hike, inflation expectations "well anchored," no systemic risk from correction. The 10 bps drop in yields is a green light for rate-sensitive assets globally. The BCB can cut in May with full Fed cover. China PMI beat at 50.5 signals stabilization - The manufacturing sector is back in expansion. If Chinese demand stabilizes, iron ore holds and Vale supports the Ibovespa. The holiday-shortened week reduces downside risk through fewer trading sessions. Brazil's Q1 decoupling is now quantifiable - The Ibovespa ends Q1 well above its 200-day SMA while all three US indices are in or near correction. The carry trade, disinflation, and oil exposure create a structural bid that survived the war's worst week.

WTI above $100 is a consumer tax that feeds through to everything - Carnival cut guidance. Airlines are bleeding. If CB Consumer Confidence drops below 85, the recession narrative becomes consensus. Powell's patience may be tested if oil keeps climbing. EU CPI at 2.6% would be a war-driven inflation shock that constrains central banks globally - If European inflation is surging from 1.9% to 2.6% in one month, the ECB cannot cut and may need to pause. This tightens global financial conditions and reduces the BCB's room to maneuver. "Take the oil" rhetoric signals escalation, not de-escalation - Trump talking about seizing Kharg Island and Bessent planning to "retake the Straits" are military escalation signals. The April 6 deadline is approaching with no ceasefire framework. If talks fail, strikes resume and Brent targets $120+.

Positioning BOTTOM LINE

Q1 ends today. Brazil closes the quarter as the EM outperformer: the Ibovespa held above 182,000 while the S&P 500 is 9% off highs and the Dow is in correction. The 14.75% Selic, the IPCA-15 at 3.74%, and the May cut path create a structural advantage that survived an oil shock, a Hormuz closure, and five weeks of war.

Powell's signal changes the global calculus. "In a good place" means no hikes, no panic, patience. The 10 bps yield drop is fuel for rate-sensitive plays in Brazil - builders, banks, real estate. If today's EU CPI doesn't shock higher, the easing bias remains intact for Q2.

The week is holiday-shortened (Good Friday), with NFP coinciding with the market closure. ADP on Wednesday and JOLTS today are the labor data. Nike reports Tuesday afternoon. Four Fed speakers today will either reinforce or moderate Powell's dovish signal.

Month two of the war begins. The April 6 deadline looms. The market's base case has shifted from "ceasefire imminent" to "protracted conflict with managed escalation." In that environment, the Ibovespa's carry trade, commodity exposure, and domestic reform story make it the better bet. Close Q1 long Brazil, cautious US.

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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