09.12.202513:46:40UTC+00Ibovespa Falls amid Political Risk Ahead of Copom and Fed Decisions

On Tuesday, the Ibovespa index dropped more than 1.5%, falling below the 156,000 mark. This decline occurred amid escalating political uncertainty and investor wariness ahead of upcoming monetary policy announcements from both the Copom and the Federal Reserve. Concerns over "Flávio Bolsonaro risk" re-emerged when former President Jair Bolsonaro confirmed his son as his preferred presidential candidate. Flávio Bolsonaro indicated on the previous day that he might reconsider his candidacy for a certain "price," but has since declared his commitment to running as non-negotiable. Meanwhile, market favorite Tarcísio de Freitas has expressed continued allegiance to Jair Bolsonaro. Investors are now anticipating policy announcements on Wednesday. The Brazilian central bank is expected to maintain the Selic rate at 15%, while the Federal Reserve is forecasted to lower interest rates by 25 basis points. Market participants will be closely monitoring the forward guidance accompanying these decisions. Among major financial institutions, Itaú saw a decrease of over 1%, and Bradesco fell approximately 2%. Petrobras experienced a slight dip of 0.3%, and Vale slipped 0.6% amid softer prices for oil and iron ore. The utilities sector also saw a downturn, with Axia and Sabesp each declining 1%. In contrast, notable gainers included Caixa Econômica Nacional with a 0.6% increase, and Suzano, which rose by 1%.