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Futures Ibovespa falls by more than 1%, following a general decline abroad; dollar and interest advance

The Ibovespa futures starts the week with a strong fall, following the general feeling of risk aversion. The pre-market in New York and the European stock exchanges operate sharply lower, after data from the Chinese economy confirmed the impacts of the restrictive measures imposed by a “Covid zero” policy in the country.

Chinese exports grew 3.9% in April, leading the country’s trade balance to a surplus of US$ 51.1 billion in the period, above expectations. Even so, the increase in exports reached the lowest level in almost two years. In March, sales abroad had advanced 14.7%.

The slowdown in Chinese exports is worrying, as it reinforces the prospect of a supply shock scenario that could lead the Federal Reserve to be more austere.

At 9:12 am (Brasilia time), the Ibovespa futures for June dropped 1.45% to 104,750 points.

The commercial dollar rose again strongly and advanced 1.29%, at R$ 5.140 in the purchase and R$ 5.141 in the sale.

Futures interest also rose in the first trades of the day: DIF23, +0.03 pp, at 13.38%; DIF25, +0.07 pp, at 12.61%; DIF27, +0.07 pp, at 12.44%; and DIF29, +0.06 pp, at 12.51%.

NY premarket drops more than 2%

In New York, futures indexes point to another day of significant losses on Wall Street.

The yield on 10-year US Treasury bonds hovers around 3.18%, the highest in nearly four years. Investors are awaiting inflation indicators for the US economy forecast for this week.

While Dow Jones futures are down 1.41%, S&P 500 and Nasdaq futures are down 1.76% and 2.3%, respectively.

Europe also in sharp decline

European stocks trade at two-month lows, echoing Chinese data and inflation. The European Central Bank signals that the economic bloc’s interest rates may be raised three times this year to fight inflation. The Stoxx 600 index operates down 2.14%.

Investors are also eyeing the war in Ukraine, as dozens of people were killed after a school in eastern Ukraine’s Luhansk region was hit by Russian bombing.

Vladimir Putin again calls the attack on Ukraine a “special military operation”. Russia’s president has not officially declared war on Ukraine and has once again called the conflict a “special operation” in a speech during the Victory Day celebrations. The date commemorates the defeat of the Nazis by the Soviets in World War II.

In his speech, Putin also made no mention of nuclear attacks. However, he claimed that the West was preparing to invade Russia by calling NATO an “obvious threat”. Thus, he justified the invasion of Ukraine as an “anticipated response to aggression”.

iron ore melts

On the Dalian Stock Exchange, iron ore contracts for September 2022 (most liquid) ended the last trading session down 5.78% at 806.5 yuan (US$119.88 equivalent) .

China’s iron ore imports fell nearly 13% in April to 86.06 million tonnes from the same period last year, the data showed. In relation to March, when the volume of purchases had already fallen 14.5% in relation to the previous year, there was a decrease of 1.4%.

Oil prices also fall sharply with the prospect of reduced Chinese demand: the barrel of Brent for July drops 2.77%, at US$ 109.28 and WTI for June 2022 operates at a low of 2.96%, the US$ 107.18.

Technical analysis by Pamela Semezatto, investment analyst and day trader specialist at Clear Corretora

Ibovespa

“It continues without showing strength in the purchase and in an intermediate support region (105,800). Next support is at 100,000 and if it loses we will have a bearish pivot on the weekly chart. To believe in further bullish movement, it needs to close above the 109,000 resistance.”

Dollar

“Second test at the resistance of BRL 5,130 and, for now, without showing a breakout, I continue to consider as consolidation between BRL 4,945 and BRL 5,130.”

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