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EQUITIES

Stocks Improve Off Mixed Start

AUSTRIA AUCTION RESULTS

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  • Brazilian President Bolsonaro remains in New York for the United Nations conference, at which a member of his delegation has tested positive for COVID. The individual has been placed in isolation, and has confirmed they were not in contact with the President.
  • Domestic equity markets closed sharply lower Monday, with the IBOVESPA finishing at the lowest levels since November last year. Judging by US futures and European cash markets, Brazilian equities may see some relief at the open after yesterday's tech and materials led rout.
  • BRL selling pressure was relatively contained Monday, with USD/BRL holding below 5.40 and continuing to gravitate toward the 200-dma. Expected BCB hawkishness on Wednesday is likely helping anchor the currency, with implied vol measures holding steady - unlike other LatAm FX.
  • Auctions results are due, with the Brazilian Treasury selling 2026, 2030 and 2055 inflation linkers.
  • The two-day Copom meeting starts today, with the board going through market and scenario analysis ahead of the decision announcement tomorrow. Full MNI Copom preview can be found here: https://marketnews.com/mni-bcb-preview-september-2021-dial-up-the-hawkishness
  • There's no notable economic data due Tuesday, although some attention may be paid to coffee output forecasts, with Conab releasing their 3rd revision of 2021 production at 0900 local time (1300BST / 0800ET).