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This Monday (28), Brazil’s stock exchange main index, the Ibovespa, opened showing negative results. Meanwhile, the day began with an appreciation movement of the Dollar against the Real. The results seen this Monday is a portrait of the general response given by financial market to Lula’s announcements and political moves, which indicate increase in Government expenses and a less rigid fiscal policy.
The Transition PEC
Investors await the final text of the Proposed Amendment to the Constitution (PEC) of the Transition and clearer signs about the fiscal policy of the new government. The scenario is a response from investors awaiting the final text of the Proposed Amendment to the Constitution (PEC) for the Transition.
Political Choice in the Economy Ministry
Last Friday (25), the index closed in a sharp drop of 2.55%, to 108,977 points, with the market reacting badly to Fernando Haddad’s speech, quoted to take over the Ministry of Finance next year. The market sees Haddad as unexperienced choice for the economy, instead of a technical one. Political commentators believe that the new Government wants to push him in this role due to the leading role he would have, which can help build his name to replace Lula, who will not seek reelection. The Ibovespa accumulates a drop of 6.08% in the month. In the year, however, it has risen by 3.96%.
Devaluation of Real
Due to the same conditions, the dollar has been gaining value against the Brazilian currency. On Friday (25), the dollar increased 1.89%, at R$ 5.4103. With the result, the currency accumulated a gain of 4.74% against the real in the month. In the year, it has a drop of 2.95%.
