Brazil’s Morning Call for Friday, February 20, 2026
Key Facts
—The Big Picture. The Ibovespa staged a powerful 1.35% rebound on Thursday, reclaiming 188,534 — its second-highest close ever — while Wall Street went the other way. The divergence was striking: Petrobras surged on oil’s continued rally (Brent above $71), banks delivered a broad-based advance led by BB (+2.48%) and Bradesco (+2.01%), and the BRL strengthened to 5.227 despite the DXY pushing to a 3.5-week high at 97.85. Meanwhile, the S&P 500 fell 0.28%, the Nasdaq slipped 0.31%, and the Dow shed 268 points as Walmart’s cautious 2026 guidance and escalating Iran tensions triggered a risk-off shift. The 10-year Treasury yield climbed to 4.09%, its highest since the hawkish FOMC Minutes jolted markets on Wednesday.
— This is part of The Rio Times’ daily Brazil Financial Morning Call, covering Latin American financial markets.
— Today is the week’s main event: December PCE inflation (consensus: 2.8% headline, 2.9% core YoY) drops alongside the advance Q4 GDP estimate (consensus: 2.8%). This is the data the Fed cares about most. A hot core PCE print would validate the hawkish minutes and likely send the DXY above 98, pressuring EM currencies. A soft reading could revive rate-cut hopes and fuel a Friday relief rally. Separately, Trump said Thursday he would decide within 10 days on military strikes against Iran — Polymarket puts the probability of a February strike above 80%. Oil remains bid. The Ibovespa faces a classic “can it hold the gains?” session after yesterday’s outsized move, with RSI now touching 72 — firmly in overbought territory.
— Binary Events
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Where We Left Off
\nThursday, February 19 close
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| Indicator | Level | Thu Chg | Weekly Chg | YTD |
|---|---|---|---|---|
| Ibovespa | 188,534 | +1.35% | +1.11% | +17.00% |
| USD/BRL | 5.227 | −0.25% | −0.16% | −4.85% |
| S&P 500 | 6,862 | −0.28% | +0.27% | +0.2% |
| Nasdaq Composite | 22,683 | −0.31% | +0.46% | −2.1% |
| 10Y Treasury | 4.09% | +1 bp | +3 bp | −48 bp |
| Gold (Comex Apr) | $4,997 | −0.24% | −1.8% | +6.5% |
| Brent Crude | $71.64 | +1.83% | +6.2% | −4.4% |
| Iron Ore (62% CFR) | ~$100/t | FLAT | −0.4% | −5.7% |
| DXY | 97.85 | +0.19% | +0.76% | −7.8% |
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What to Watch Today
\nFriday, February 20
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PCE is the main event. The December Personal Consumption Expenditures price index — the Fed’s preferred inflation gauge — drops at 8:30 ET alongside the advance Q4 GDP estimate. Consensus expects headline PCE at 2.8% YoY and core at 2.9% (up from 2.8%). GDP is expected at 2.8% QoQ annualized, a deceleration from 4.4% in Q3 but still solid. A hot core PCE above 3.0% would validate the hawkish FOMC Minutes and could push the 10Y yield above 4.15% and the DXY toward 98. A softer print would offer relief to EM assets and the BRL carry trade. Michigan final sentiment at 10:00 ET carries outsized weight this month — the preliminary 1-year inflation expectations jumped to 4.0% (from 3.3%), and the final revision matters for the Fed’s credibility narrative.
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For the Ibovespa specifically: After yesterday’s 1.35% surge, the index sits at RSI 72 — technically overbought. The all-time closing high of 189,699 (Feb 11) is within striking distance, just 0.6% away. But Friday sessions after a strong Thursday tend to consolidate. Watch for profit-taking in Petrobras if oil stabilizes around $71. Volume was strong at R$34.2B yesterday — if today’s turnover drops below R$20B, it signals conviction is fading.
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Live Market IntelligenceBrazil Morning Call — Live Board
Rio Times · Live Market Intelligence
Brazil Morning Call — Live Board
+1.85%
171,031.73
+1.85%
65,223.89
+1.36%
11,338.38
+0.89%
2,913,184
+1.30%
2,459.23
+0.61%
58,698.13
+2.60%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 171,031.73 | +1.85% | +21.85% | 167,927.15 | 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
\nTechnical snapshot for Friday’s session
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The Ibovespa’s Thursday session was a textbook recovery: opening near 186,020, dipping to 185,928 intraday, then powering up to close at 188,534 — a gain of 2,518 points. This is the second-highest close in history, behind only the 189,699 print from February 11. Petrobras ON led the charge (+2.62%) as Brent continued its geopolitical-driven rally, while banks delivered a coordinated advance: BB ON +2.48%, Bradesco PN +2.01%, Itaú PN gaining. The metals sector was the notable laggard, with Vale pressured by the lack of Dalian price discovery during the Lunar New Year shutdown.
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Bull case: The structural story remains intact. Foreign flows have exceeded R$33B YTD — extraordinary by any measure. The BRL’s resilience despite DXY strength signals genuine conviction in the Brazil trade. Petrobras has room to gap up further if EIA data confirms the API draw and Brent holds above $71. If PCE comes in soft, the Ibovespa could challenge the all-time high today. Bear case: RSI at 72 is flashing overbought. The index has been here before and consistently pulled back from the 189K–190K zone. A hot PCE could trigger a DXY spike that drags EM currencies and forces the BCB into a more cautious posture ahead of the March Copom. Thin Friday volumes could amplify moves in either direction.
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Key Facts
—Resistance. 189,699 (ATH close, Feb 11) → 190,561 (ATH intraday) → 191,702 (upper Bollinger Band). Support: 186,192 (20-day EMA) → 185,976 (Feb 14 close) → 183,100 (50-day SMA). RSI: 72.1 (14-day) — overbought zone; prior reversals triggered near 73–75.
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Road to March Copom
\n25 days to decision · March 17–18
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The IBC-Br data released Thursday showed Brazil’s economic activity grew 2.5% in 2025, surpassing the Finance Ministry’s 2.2% estimate. This robust activity backdrop complicates the BCB’s easing path: the economy isn’t slowing enough to justify aggressive cuts, but the Selic at 15% is historically restrictive. The hawkish FOMC Minutes this week — with several officials openly discussing rate hikes — further narrows BCB Governor Galípolo’s room to maneuver.
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Today’s PCE is a direct input to the Copom calculus. If U.S. inflation remains sticky above target, the Fed‘s “higher for longer” stance hardens, pressuring the BRL and forcing the BCB to weigh external stability against domestic activity. The oil surge adds another variable: Brent above $70 feeds through to fuel costs and inflation expectations in Brazil within 30–60 days. The consensus path remains a cautious 25bp cut on March 17 with dovish forward guidance, but the probability distribution is shifting toward a hold if external conditions deteriorate further.
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Key Facts
— The March cut remains base case, but its size is the swing variable. A 25bp cut with cautious guidance is now the modal expectation. Today’s PCE could shift the needle: a soft print (≤2.7% core) would restore confidence in a 50bp start, while a hot print (≥3.0% core) could push the committee toward holding. The BRL at 5.227 provides some cushion, but the DXY at 97.85 is a headwind. Watch the dólar futuro closely today — if it pushes above 5.30, the March cut probability drops sharply.
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Economic Calendar
\nFriday, February 20, 2026
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| Time (ET) | Event | Impact |
|---|---|---|
| All Day | Holiday: China (Lunar New Year continues) — no Dalian iron ore trading | HOLIDAY |
| Pre-Mkt | Global PMIs: Japan Mfg 52.8 (beat 51.3), Services 53.8 | India Mfg 57.5 | UK Retail Sales +1.8% MoM (blowout) | German PPI −0.6% MoM (deflation deepens) | MEDIUM |
| 07:00 | Mexico — Retail Sales (Dec) \nPrev +4.4% YoY. Consumer health gauge ahead of Banxico’s next decision. |
MEDIUM |
| 08:30 | U.S. Mega Data Dump: \n▸ Q4 GDP Advance: Cons 2.8% | Prev 4.4% \n▸ Core PCE (YoY Dec): Cons 2.9% | Prev 2.8% — the Fed’s preferred inflation gauge \n▸ PCE headline (YoY): Cons 2.8% | Prev 2.8% \n▸ Personal Income (MoM): Cons +0.3% | Prev +0.3% \n▸ Personal Spending (MoM): Cons +0.4% | Prev +0.5% \n▸ GDP Price Index: Cons 2.8% | Prev 3.7% |
HIGH |
| 09:45 | U.S. Feb Flash PMIs (S&P Global) \nMfg Cons 52.4 | Prev 52.4 · Services Cons 53.0 | Prev 52.7 · Fed’s Bostic speaks (same slot) |
HIGH |
| 10:00 | Michigan Consumer Sentiment (Feb Final) \nCons 57.3 | Prev 56.4 · 1-Year Inflation Exp: Cons 3.5% (from 4.0%) · 5-Year: 3.4% | Prev 3.3% |
HIGH |
| 10:00 | New Home Sales (Dec) + Atlanta Fed GDPNow (Q1) \nNew Homes Cons 732K | Prev 737K. GDPNow: Cons 3.0% |
MEDIUM |
| 13:15 | Fed’s Logan Speaks | MEDIUM |
| 13:00 | Baker Hughes Oil Rig Count \nPrev 409 rigs. Supply-side signal amid Iran-driven price rally. |
LOW |
| 15:30 | CFTC Commitments of Traders \nPositioning data for BRL, gold, crude, S&P. BRL speculative net longs at +31.6K — watch for changes. |
LOW |
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Key Facts
—8:30 ET data dump. delivers both Q4 GDP and December PCE simultaneously — a rare double-barreled release that will set the tone for the entire trading day. If GDP comes in above 3.0% and core PCE hits 3.0%, the “no cuts in 2026” narrative gains traction and the dollar rallies hard. The February flash PMIs at 9:45 ET provide the first real-time activity data for this month, with manufacturing the key watch. Michigan sentiment at 10:00 ET matters for the inflation expectations revision — a downward revision from the alarming 4.0% preliminary to the 3.5% consensus would ease some pressure. Mexico retail sales add LatAm context. The afternoon belongs to Fed speakers (Bostic, Logan) who will parse the morning’s data in real time.
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LatAm Markets Snapshot
\nThursday, February 19 close
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| Index | Level | Thu Chg | RSI (14d) | Signal |
|---|---|---|---|---|
| Ibovespa (Brazil) | 188,534 | +1.35% | 72 | Overbought |
| IPC (Mexico) | 70,846 | −0.06% | 63 | Neutral-Bullish |
| COLCAP (Colombia) | 2,386 | +0.84% | 55 | Neutral |
| IPSA (Chile) | 10,809 | −0.51% | 39 | Bearish |
| MERVAL (Argentina) | 2,839,106 | +4.26% | 46 | Neutral |
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The MERVAL’s 4.26% surge stands out — Argentina’s index rallied on Milei reform optimism and ahead of the January trade balance release (expected $900M surplus, 26th consecutive positive month). Chile’s IPSA was the laggard, slipping below its 200-day EMA with RSI at 39 signaling further downside risk. Colombia’s COLCAP continues its steady grind higher, benefiting from the oil rally given Ecopetrol’s index weight. Mexico’s IPC was essentially flat as markets awaited Banxico’s signal from yesterday’s monetary policy minutes.
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Commodities & FX Deep Dive
\nThursday close & overnight developments
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Oil: Brent crude settled around $71.64, extending its Iran-driven rally with gains of roughly 1.8% on the session. WTI pushed above $66. The geopolitical premium continues to build: Trump said Thursday he would decide within 10 days on military strikes against Iran, and the U.S. military buildup in the region is reportedly the largest since the 2003 Iraq invasion. Polymarket shows >80% odds of a February strike. The EIA weekly data confirmed a smaller-than-expected build, keeping the bullish narrative alive. For Brazil, oil above $70 is a Petrobras tailwind but an inflation headwind — a dual-edged dynamic that grows more acute as the March Copom approaches. Brent futures are trading around $71.85 in early Friday trading.
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Iron Ore: Holding near $100/t on Singapore-traded futures, but price discovery remains limited with Chinese markets closed for Lunar New Year through the weekend. China reopens Monday — the first session back will set the tone for the week ahead. Port inventories remain elevated above 160M tons, and Simandou supply looms as a structural headwind. Vale’s strong Q4 results are largely digested; the stock now tracks China’s return.
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Gold: Comex April gold settled at $4,997.40 (−0.24%), caught between competing forces — geopolitical risk from Iran supports safe-haven demand, but the stronger dollar and rising yields cap upside. Gold has pulled back sharply from its $5,600+ highs earlier in the month. Overnight, spot gold is hovering around $5,005–$5,030, stabilizing. Asian liquidity remains thin with China closed.
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DXY / BRL: The Dollar Index pushed to a 3.5-week high at 97.85 (+0.19%), supported by the hawkish FOMC backdrop and stronger-than-expected jobless claims (206K vs 225K expected). Despite DXY strength, the BRL held firm at 5.227 — a sign that the carry trade (15% Selic) and structural EM rotation are providing a floor. The dólar futuro closed at 5.2575 (+0.35%), suggesting some hedging activity. Key level to watch: if DXY breaks above 98 on a hot PCE, USD/BRL could test 5.30. Early Friday: DXY is steady around 97.85, S&P futures are up 0.3%.
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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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Soft PCE — core ≤2.7% revives rate-cut narrative, dollar weakens, BRL strengthens toward 5.15 \n GDP + PCE goldilocks — growth holds at 2.8% with tame inflation = soft landing confirmed \n Petrobras momentum — Brent above $72 could push PBR another 1–2%, anchoring Ibovespa near ATH \n Michigan inflation revised down — 1Y expectations falling from 4.0% to ≤3.5% eases Fed pressure \n |
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Hot core PCE ≥3.0% — validates hawkish minutes, DXY spikes above 98, EM currencies sell off \n Iran strike announcement — oil above $75 would reignite global inflation fears, hit risk assets \n Overbought reversal — Ibovespa RSI 72 + Friday + ATH proximity = classic setup for profit-taking \n Michigan inflation sticks at 4.0% — consumers unanchoring inflation expectations would spook the Fed \n |
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Positioning for the Session
\nTactical considerations for Friday’s full session
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Everything hinges on 8:30 ET. The pre-market will be quiet as the entire market waits for the Q4 GDP and PCE release. Once the numbers hit, expect a fast repricing — Treasuries, the dollar, and equity futures will move within seconds. The B3 opens at 10:00 AM BRT (7:00 ET, pre-opening at 9:45 AM BRT), meaning Brazilian traders will have the PCE data digested before the regular session starts. This removes the uncertainty of a mid-session shock.
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Key watches: (1) Petrobras — now repriced for $70+ oil, but further upside depends on Brent holding above $71. Watch the Baker Hughes rig count at 1:00 PM ET for supply signals. (2) Banks — yesterday’s broad advance needs follow-through; DI futures (juros futuros) rose across the curve, which is typically a headwind for rate-sensitive names unless offset by strong earnings momentum. (3) Vale — China reopens Monday; today may see positioning ahead of the return. (4) USD/BRL — the 5.22–5.30 range is the battleground; PCE determines direction.
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Key Facts
— The Ibovespa’s structural bull case — massive foreign inflows, BRL resilience, oil-fueled Petrobras earnings — survived a hawkish Fed week and actually strengthened. Yesterday’s 1.35% rebound proved that dip-buyers are in control. But the index is now at RSI 72, just 0.6% from its all-time high, heading into the most important U.S. data release of the month. A soft PCE could catapult the index to new records; a hot one could trigger the overbought pullback the technicals have been warning about. The week’s direction is decided in the next four hours. Bias: cautiously constructive, with the understanding that the data will override all positioning.
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Related coverage: Ibovespa session | dollar-real exchange rate
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