Brazil Financial Morning Call for Wednesday, February 18, 2026
Ash Wednesday · B3 Reopens at 1PM BRT
This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.
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Key Facts
—The Big Picture. The Ibovespa reopens this afternoon after a three-day Carnival break into a market that looks remarkably similar to where it left off — but with a minefield of macro catalysts dead ahead. The S&P 500 closed essentially flat on Tuesday at 6,843 (+0.1%), the Nasdaq eked out a +0.14% gain to 22,578, and the Dow settled at 49,533 (+0.07%). The feared post-holiday U.S. rout did not materialize: tech opened sharply lower on continued AI disruption anxiety — Oracle, Intuit, and Salesforce fell 3–5%, CrowdStrike plunged 7% after a Mizuho downgrade, and AMD dropped 4% — but a late-session Apple rally (+3% on AI wearables news) and a bounce in airlines pulled the indices back to green. The 10-year Treasury yield held at 4.058%, barely changed from Friday’s 4.04%. The USD/BRL in offshore trading is stable at ~5.22.
— The gap risk that traders feared heading into Carnival has been minimal. The Ibovespa’s Friday close of 186,464 should translate to a roughly flat-to-slightly-lower opening this afternoon, with the direction of the abbreviated session likely determined by two things: (1) how European markets trade into the U.S. open, and (2) whether the FOMC Minutes at 2PM ET (3PM BRT) deliver any hawkish surprises. The structural bull case — rate cuts ahead, foreign inflows, weak dollar — is unchanged. But this four-hour session on reduced liquidity is a coiled spring: amplified moves in both directions are the base case.
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Where We Left Off
\nFriday, February 13 close → Tuesday, February 17 U.S. close
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| Indicator | Level | Fri Chg | Weekly Chg | YTD |
|---|---|---|---|---|
| Ibovespa | 186,464 | −0.69% | +1.92% | +15.73% |
| USD/BRL | 5.2229 | +0.60% | −0.15% | −4.86% |
| S&P 500 | 6,843 | +0.10% | −1.39% | −1.5% |
| Nasdaq Composite | 22,578 | +0.14% | −2.10% | −2.4% |
| U.S. 10Y Treasury | 4.058% | +2bps | −11bps | lowest since Dec |
| Gold (spot) | ~$4,938 | −1.3% | −2.0% | +5.1% YTD |
| Brent Crude | $67.44 | −0.6% | −2.9% | below 2025 avg |
| Iron Ore (62% Fe) | ~$99.7/t | flat | −1.1% | −5.8% |
| DXY | 97.28 | +0.48% | +0.36% | weakening trend |
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What to Watch Today
\nWednesday, February 18 — B3 reopens, FOMC Minutes day
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B3 reopens at 1PM BRT (12PM ET). The Ibovespa resumes with a continuous session from 1PM to 5:55PM BRT, preceded by a pre-opening from 12:45PM. This is a structurally low-liquidity session — post-Carnival volumes are historically 30–40% below normal — which means price moves in both directions will be amplified. Traders will compress three days of global price action into four hours.
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FOMC Minutes (2PM ET / 3PM BRT). The critical release of the day. The minutes from the January meeting — the last chaired by Powell before Kevin Warsh takes over in May — will be parsed for any signals on the timing and pace of rate cuts. Markets currently price two 25bp cuts in 2026, with the first likely in June. Any language suggesting the bar for cuts is higher than expected would push Treasury yields up and pressure EM equities. Conversely, dovish language could accelerate the rally. Fed’s Goolsbee said Tuesday he sees “several more rate cuts” possible if inflation continues toward 2%.
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Iran–U.S. nuclear deal progress. Iranian FM Araghchi announced a “general agreement on guiding principles” on Tuesday, sending oil lower. Brent fell below $67.50, and WTI dropped to ~$62.25. If talks continue to advance, the risk premium on oil will keep unwinding — manageable for Petrobras but a headwind for the energy complex. Any breakdown in talks could snap Brent back above $70.
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Palo Alto Networks earnings (after U.S. close). The cybersecurity bellwether reports today. Results will signal whether the AI disruption narrative — which has hammered SaaS, logistics, and wealth management stocks — extends to cybersecurity. A strong report could provide relief to the battered tech sector; a miss deepens the rout.
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Heavy macro data dump at 8:30 AM ET. This is far from a quiet Ash Wednesday. The delayed December Durable Goods Orders (consensus −1.8% MoM, after an outsized +5.3% prior) land alongside Housing Starts and Building Permits. A sharper-than-expected Durable Goods drop would reinforce the slowdown narrative and support rate-cut bets. At 9:15 AM, Industrial Production and Capacity Utilization round out the U.S. morning picture. Then at 1PM ET — right as B3’s pre-opening begins — FOMC hawk Bowman speaks and the 20-Year Bond Auction hits. The BCB Focus survey at 6:25 AM ET will also be closely watched for any shifts in Copom expectations.
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Live Market IntelligenceBrazil Morning Call — Live Board
Rio Times · Live Market Intelligence
Brazil Morning Call — Live Board
-0.27%
166,334.86
-0.27%
63,933.69
-0.50%
11,186.57
+0.34%
2,891,651
+0.00%
2,461.23
+0.36%
58,401.58
-1.35%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 166,334.86 | -0.27% | +21.85% | 166,783.57 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| EUR/BRL | 5.95 | +1.01% | -5.83% | 5.89 | 5.98 | 5.94 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| BRENT | 88.88 | -0.03% | +34.42% | 88.91 | 90.07 | 88.12 | 29,713 |
| WTI | 83.11 | -0.11% | +31.57% | 83.20 | 84.35 | 82.40 | 166,848 |
| IRON ORE | 161.91 | — | +58.10% | 161.91 | 161.91 | 1 | |
| GOLD | 4,461 | +1.78% | +33.20% | 4,383 | 4,503 | 4,421 | 139,824 |
| SILVER | 65.59 | +1.26% | +73.05% | 64.77 | 66.98 | 64.81 | 46,406 |
| LITHIUM | 75.20 | +1.47% | +62.95% | 74.11 | 75.80 | 75.08 | 89,275 |
| SOY | 1,184 | +3.20% | +17.05% | 1,148 | 1,199 | 1,168 | 163,179 |
| CORN | 480.50 | +10.02% | +29.34% | 436.75 | 480.75 | 459.50 | 341,248 |
| WHEAT | 655.00 | +3.93% | +29.70% | 630.25 | 657.75 | 631.50 | 128,793 |
| COFFEE | 317.25 | -5.51% | +0.67% | 335.75 | 321.20 | 313.55 | 21,747 |
| SUGAR | 16.43 | -1.79% | -3.01% | 16.73 | 17.11 | 16.22 | 171,992 |
| ORANGE JUICE | 138.55 | -0.47% | -45.38% | 139.20 | 141.05 | 137.50 | 703 |
| COTTON | 85.03 | +2.33% | +26.78% | 83.09 | 82.90 | 81.96 | 16,546 |
| BEEF | 223.60 | -3.93% | -5.18% | 232.75 | 226.40 | 223.00 | 16,126 |
| CATTLE | 339.10 | -3.16% | -1.82% | 350.17 | 345.50 | 338.60 | 10,164 |
| COCOA | 5,719 | +3.18% | -34.96% | 5,543 | 5,779 | 5,574 | 26,773 |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| KLABIN | 17.69 | +0.80% | -2.95% | 17.55 | 17.74 | 17.48 | 2,057,400 |
| SLCE3 | 13.34 | +0.30% | -12.25% | 13.30 | 13.42 | 13.20 | 1,454,200 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
| LREN3 | 11.87 | -1.33% | -28.65% | 12.03 | 12.17 | 11.83 | 9,683,300 |
The Ibovespa Setup
\nCarnival gap risk was minimal — the reopening is about FOMC, not catch-up
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The good news for bulls: the U.S. session on Tuesday was almost perfectly benign. The S&P 500 clawed back from an early 0.7% decline to close +0.1%. The Nasdaq, which opened down 0.7% on AI disruption selling, finished +0.14% thanks to Apple’s 3% rally and an airline sector bounce. The 10-year Treasury yield is steady at 4.058%. The USD/BRL in offshore markets dipped to 5.2229, slightly stronger than Friday’s 5.2306 close.
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The gap is essentially zero. Unlike the feared scenario of a 1–2% S&P 500 selloff during Carnival, the Ibovespa is likely to open near Friday’s levels. The intraday direction will be dictated entirely by the FOMC Minutes at 3PM BRT — which falls right in the middle of the abbreviated session. This is the fulcrum event.
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What would change the picture: If the FOMC Minutes reveal a more hawkish internal debate than expected — particularly any pushback against June cuts or concerns about re-accelerating inflation — the Ibovespa could sell off 1%+ in the final two hours. If the minutes are neutral-to-dovish, the bull case remains intact and 187,000+ is achievable this week. Watch for early signals: S&P 500 futures are currently at ~6,819 (−0.25%), suggesting a modestly weaker U.S. open.
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Key Facts
—Support. 183,662 (Feb 13 intraday low) → 182,000 (BB Investimentos technical support) → 180,789 (Bollinger mid-band). Resistance: 187,766 (Feb 12 close) → 190,561 (all-time intraday high, Feb 11) → 194,000 (Safra Invest projection). The bull trend is intact above 183,000. A close below that level today would signal a deeper correction toward 180,000.
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Road to March Copom
\n27 days to Brazil’s first rate cut in over a year
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The March 17–18 Copom meeting is now less than four weeks away. The BCB Focus survey released Monday (during Carnival, with limited market impact) showed the 2026 IPCA forecast holding at ~3.97%, well inside the 4.50% ceiling. The year-end Selic consensus remains at 12.25%, implying ~275bps of cuts from the current 15%. January’s IPCA came in at 4.44% YoY — broadly in line with expectations but a reminder that the disinflation trend still has work to do.
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Today’s FOMC Minutes are directly relevant to the Copom calculus. The Selic-Fed Funds spread is a key variable for the BCB: a more dovish Fed path means more room for Brazilian cuts. Fed’s Goolsbee’s comment on Tuesday — “several more rate cuts” if inflation cooperates — was constructive. The remaining inputs before March 17 are: Friday’s delayed Q4 GDP and PCE data, the February IPCA-15 preview (due early March), and any fiscal noise from Brasília.
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Key Facts
— The March cut remains locked in. The debate is pace, not direction: 25bp (Galípolo’s cautious consensus) vs 50bp (XP’s base case). The FOMC Minutes today may narrow the range of outcomes by clarifying the Fed’s own path. A dovish set of minutes strengthens the case for a bolder 50bp start. A hawkish surprise narrows the BCB’s room to maneuver.
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Economic Calendar
\nWednesday, February 18, 2026
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| Time (ET) | Event | Impact |
|---|---|---|
| All Day | Holidays: Brazil (Ash Wednesday — B3 1PM–5:55PM BRT), China & South Korea (Lunar New Year), Jamaica | HOLIDAY |
| 02:00 | UK CPI (YoY) (Jan) \nAct: 3.0% | Cons: 3.0% | Prev: 3.4%. Core CPI 3.1% vs 3.0% expected — slightly hot. BoE easing path may slow. |
MEDIUM |
| 06:25 | BCB Focus Market Readout \nWeekly consensus survey — watch for shifts in IPCA 2026 forecast and year-end Selic expectations ahead of March Copom. |
HIGH |
| 07:00 | MBA Mortgage Applications (weekly) \nPrev: −0.3%. 30Y rate prev: 6.21%. |
LOW |
| 08:30 | U.S. Data Dump (delayed December releases): \n▸ Durable Goods Orders (Dec): Cons −1.8% | Prev +5.3% — big swing expected \n▸ Core Durable Goods (Dec): Cons +0.3% | Prev +0.4% \n▸ Housing Starts (Dec): Cons 1.310M | Prev 1.246M \n▸ Building Permits (Dec): Cons 1.400M | Prev 1.411M |
HIGH |
| 09:15 | U.S. Industrial Production & Capacity Utilization (Jan) \nIP Cons: +0.4% | Cap Util Cons: 76.6%. Manufacturing Production Cons: +0.4%. |
MEDIUM |
| 11:00 | Atlanta Fed GDPNow (Q4 delayed) \nPrev: 3.7%. |
LOW |
| 12:00 | ECB’s Schnabel Speaks \nWatch for euro rates guidance — France CPI also releasing today. |
MEDIUM |
| 13:00 | U.S. 20-Year Bond Auction + FOMC Member Bowman Speaks \nPrev 20Y yield: 4.846%. Bowman is a hawk — any rate-cut pushback will move Treasuries. Both hit during B3’s first hour. |
HIGH |
| 14:00 | FOMC Minutes (January meeting) \nLast meeting before Warsh transition. Rate-cut timing debate and balance sheet discussion. Hits at 3PM BRT — mid-session for B3. |
HIGH |
| 16:00 | TIC Data (Dec) — Foreign buying of U.S. Treasuries \nNet long-term: Cons $128.6B | Prev $220.2B. Watch for China/Japan holdings shifts. |
MEDIUM |
| 16:30 | API Weekly Crude Oil Stock \nPrev: +13.4M barrels (massive build). Another big build would pressure Brent further. |
MEDIUM |
| AMC | Palo Alto Networks (PANW) Earnings \nAI disruption bellwether for cybersecurity. After U.S. close. |
HIGH |
| BMO | Constellation Energy (CEG) Earnings \nAI data center buildout beneficiary. Before U.S. open. |
MEDIUM |
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Key Facts
—data dump at 8:30 ET. (Durable Goods + Housing Starts) and Industrial Production at 9:15, both capable of moving Treasury yields before B3 even opens. At 1PM ET, Bowman speaks and the 20-Year auction hit right as the Ibovespa begins trading. Then the FOMC Minutes at 2PM ET (3PM BRT) are the day’s fulcrum. The BCB Focus at 6:25 ET may also shift Copom expectations. Four HIGH-impact events in a single abbreviated session — this is not a day to be asleep at the wheel.
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LatAm Markets Snapshot
\nTuesday, February 17 — Non-Carnival markets traded; Brazil reopens today
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| Index | Level | Tue Chg | RSI (daily) | Status |
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| Ibovespa | 186,464 | CLOSED | ~62 | REOPENS 1PM |
| S&P/BMV IPC | ~71,500 | ~flat | ~68 | ATH zone |
| MSCI COLCAP | ~2,370 | ~flat | ~55 | OPEN today |
| S&P IPSA | ~10,900 | ~flat | ~58 | OPEN today |
| MERVAL | — | CLOSED | — | CARNIVAL |
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Mexico’s IPC remains near its 13th all-time high close of 2026, led by América Móvil and Grupo México. The post-Carnival Thursday selloff (IPC −1.11%, COLCAP −2.00%, IPSA −0.49%) was partially recovered during the Presidents’ Day holiday-shortened week. The EM rotation trade that powered January’s inflows remains intact, but the next leg requires fresh catalysts — today’s FOMC Minutes being the most immediate candidate.
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Commodities & FX Deep Dive
\nOil, metals, and the dollar under the microscope
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Oil: Brent fell to $67.44 on Tuesday, extending last week’s decline as the Iran–U.S. nuclear framework eased supply disruption fears. Trump called the talks “very good” while Tehran described them as “a step forward.” Both sides agreed to continue negotiations. WTI traded at ~$62.25. However, uncertainty persists — Iran insists on maintaining uranium enrichment, a key U.S. red line. India’s oil import picture adds a wrinkle: the U.S. trade deal linked to halting Russian crude purchases has not been officially confirmed by New Delhi. For Petrobras, $67 Brent is comfortable but trending toward the lower bound of 2026 planning assumptions.
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Iron Ore: The 62% Fe benchmark is at ~$99.7/t, hovering just below the psychologically important $100 level. Chinese port inventories topped 160 million tons for the first time since February 2022, as demand softened ahead of Lunar New Year. Australian and Brazilian shipments accelerated in late January. The bearish structural story (Simandou supply, weakening Chinese construction, electric-arc furnace substitution) is playing out, but China’s parliamentary meeting in March could announce stimulus measures that temporarily support prices. Near-term range: $95–$105.
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Gold: Spot gold fell to ~$4,938/oz, down from record highs above $5,000. Silver tumbled 4.7% as Chinese buyers dumped holdings. The pullback is viewed as profit-taking rather than a trend reversal — Saxo Bank notes that structural drivers (central bank buying, geopolitical fragmentation, currency debasement fears) remain firmly in place. Gold is still +5.1% YTD.
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DXY / BRL: The Dollar Index bounced to 97.28 on Tuesday (+0.48%), with options markets showing near-term bearishness on the greenback has eased. The BRL held firm at 5.22 — still near its strongest since May 2024. The carry trade remains attractive with the Selic at 15% and real yields among the highest in EM. The risk is if the FOMC Minutes trigger a dollar rally, which would test the 5.25 level.
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Risk Map
\nWhat could go right — and wrong — today
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| Bull Case | Bear Case |
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FOMC Minutes dovish — language supports June cut, accelerates EM rally \n Foreign inflow momentum — R$4.2B net in Feb so far, R$26.3B in Jan \n 10Y yield stays below 4.10% — supports risk assets and BRL carry trade \n Iran deal advance — removes oil risk premium, lowers inflation expectations \n |
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FOMC Minutes hawkish — pushback on June cut, Treasury yields spike \n Thin liquidity amplifies — post-Carnival volumes 30–40% below normal \n AI disruption contagion — Palo Alto miss extends tech rout to EM beta \n Iran talks collapse — Brent snaps back above $70, fueling inflation fears \n |
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Positioning for the Session
\nTactical considerations for Wednesday’s abbreviated session
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The playbook is more complex than it appears. The B3 session is only four hours, but the volatility pipeline starts well before the opening bell. By the time the Ibovespa opens at 1PM BRT (12PM ET), traders will already be digesting Durable Goods (8:30), Industrial Production (9:15), and the BCB Focus survey (6:25). Then the first hour of trading overlaps with Bowman’s speech and the 20-Year auction (1PM ET). The real crescendo is the FOMC Minutes at 3PM BRT. This is an unusually dense event sequence for a half-day session — trade accordingly.
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Key watches for the session: (1) USD/BRL opening level — if it gaps above 5.25, the Ibovespa will face immediate selling pressure. (2) European close at 12:30 PM ET — any late-session European weakness will feed directly into B3’s opening hour. (3) The first 15 minutes after the FOMC Minutes — this is where the day’s direction gets set. (4) The call close auction (5:55–6PM BRT) — low-liquidity window where significant price dislocations can occur.
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Key Facts
— The Ibovespa returns from Carnival with its structural bull case intact — foreign inflows, rate-cut cycle ahead, BRL strengthening, global rotation into EM. The Carnival gap was essentially zero. The question is not whether this rally continues, but whether the FOMC Minutes today provide the next catalyst or the first real speed bump. Trade the second half of the session, not the first.
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Related coverage: Ibovespa session | dollar-real exchange rate
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