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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
BRAZIL
- The global risk off environment has been weighing on the Brazilian real in recent weeks; BRL is down over 11% since the start of the second quarter, nearly erasing all of its Q1 gains.
- USDBRL broke above its 200DMA on Friday and is currently trading at its highest level since the end of January.
- Next ST resistance to watch on the topside stands at 5.40.
- As a result, BRL weakness has also been driving down domestic equities; Ibovespa is down nearly 15% from its early June highs.
- The chart below shows the strong co-movement between Ibovespa and USDBRL (inverted); periods of real weakness have generally been associated with cheaper equities and vice versa.
- Ibovespa index broke below the 100,000 level in June and is currently trading its lowest level since November 2020; next strong support to watch on the downside stands at 93,3390.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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