Brazil’s Morning Call for Thursday, February 19, 2026
First Full B3 Session Post-Carnival · Hawkish Fed Minutes Reshape the Landscape
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 faces its first full trading session of 2026’s post-Carnival era with a dramatically different global backdrop than the one traders left behind on Friday. Yesterday’s abbreviated Ash Wednesday session was supposed to be a quiet re-entry — instead, it delivered a hawkish FOMC Minutes bombshell and a 4% oil spike that scrambled the calculus for Brazilian equities. The Ibovespa closed down just 0.24% at 186,016 on light volume (R$18.1B), but the real action came after B3 shut: Brent surged to $70.35 (+4.35%) on reports Israel raised its alert level over a possible U.S./Israeli attack on Iran, and Vice President Vance declared that Tehran had “ignored key U.S. demands.” Russia-Ukraine talks in Geneva collapsed after just two hours. Meanwhile, the FOMC Minutes revealed several Fed officials openly discussing the possibility of rate hikes — not cuts — if inflation remains above target. The 10-year Treasury yield jumped to 4.087% and the DXY surged to 97.73.
— For Brazil, the implications are complex. The oil spike is a double-edged sword: it lifts Petrobras but reignites inflation fears just 26 days before the March Copom. The hawkish Fed narrows the BCB’s room for rate cuts and pressures the BRL carry trade. But the S&P 500 still managed to close up 0.56% on Wednesday — tech bounced, with Nvidia +1.6% and Amazon +2% — suggesting equity markets are for now shrugging off the rate uncertainty. Today’s session will be the first real test of whether the post-Carnival bull thesis can survive a more hostile rates environment.
— Binary Events
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Where We Left Off
\nWednesday, February 18 close
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| Indicator | Level | Wed Chg | Weekly Chg | YTD |
|---|---|---|---|---|
| Ibovespa | 186,016 | −0.24% | −0.24% | +15.45% |
| USD/BRL | 5.249 | +0.34% | +0.34% | −4.40% |
| S&P 500 | 6,881 | +0.56% | +0.56% | −0.9% |
| Nasdaq Composite | 22,754 | +0.78% | +0.78% | −1.6% |
| U.S. 10Y Treasury | 4.087% | +3bps | +3bps | −8bps YTD |
| Gold (spot) | ~$4,918 | ~flat | ~flat | +4.8% YTD |
| Brent Crude | $70.35 | +4.35% | +4.35% | −6.8% YTD |
| Iron Ore (62% Fe) | ~$100/t | flat | flat | −5.4% |
| DXY | 97.73 | +0.59% | +0.59% | −0.5% YTD |
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What to Watch Today
\nThursday, February 19 — First full B3 session post-Carnival
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FOMC Minutes aftermath. The January minutes were significantly more hawkish than expected. Several Fed officials indicated that rate hikes could be appropriate if inflation remains stubbornly above target. Most participants cautioned that progress toward 2% “might be slower and more uneven than generally expected.” The committee held at 3.50%–3.75% and appears to be shifting further from consensus on when — or whether — to cut next. EY has pushed its first cut forecast to July from June; Goldman still sees June as possible but conditional. Money markets price 57bps of cuts this year (~two 25bp reductions), with the first likely not before June. For Brazil, this narrows the BCB’s room for an aggressive easing cycle.
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Oil surges 4% on Iran escalation — Petrobras in focus. Brent jumped $2.93 to $70.35 (+4.35%) after reports that Israel raised its alert level on increased indications of a possible U.S./Israeli strike on Iran. VP Vance said Tehran had not met core U.S. demands. Russia-Ukraine talks in Geneva collapsed after just two hours. Iran’s Revolutionary Guard conducted live-fire drills in the Strait of Hormuz, briefly closing parts of the waterway. Eurasia Group puts a 65% probability on U.S. military strikes by April. This reignites the geopolitical risk premium on oil and is a tailwind for Petrobras — but a headwind for inflation and the March Copom calculus.
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Palo Alto Networks tanked 10% after hours. The cybersecurity firm’s earnings guidance came in below expectations, extending the AI disruption sell-off that has hammered software stocks all month. AMD lost nearly 4% during the regular session. The AI trade is bifurcating: infrastructure plays (Nvidia, data centers) outperform while software/services face repricing risk. Brazilian tech-exposed names could feel spillover pressure.
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Vale Q4 earnings digest. Vale reported a $3.8B accounting loss on $3.5B nickel impairment and $2.8B deferred tax write-down. But proforma profit was $1.4B (+68% YoY), EBITDA hit $4.8B (+17%), and cash generation was robust. The market already sold VALE3 down 1.5% on Friday before Carnival; today’s reaction will depend more on iron ore dynamics and the DXY than the earnings themselves. Iron ore is flat at ~$100/t with Chinese markets still closed for Lunar New Year through Feb 23.
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Banco Pleno liquidation. The BCB ordered the extrajudicial liquidation of Banco Pleno on Wednesday, which could generate a R$5B impact on the FGC (deposit guarantee fund) and elevate total exposure linked to Grupo Master to R$52B. This is a potential systemic risk signal that bears monitoring, though the immediate market impact appears contained.
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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
\nHawkish Fed meets oil spike — first full session tells the story
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Yesterday’s abbreviated session was a non-event: the Ibovespa shed just 0.24% to 186,016 on below-average volume (R$34.2B total, R$18.1B in the cash market). The opening print was 186,464 — matching Friday’s close — confirming that Carnival gap risk was essentially zero. GPA was the biggest loser (−4.55%) while Raízen surged 6.35%. But the post-close newsflow was far more consequential than anything that happened during the session.
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Today’s cross-currents are unusually complex. On the bull side: Brent at $70.35 is a significant positive for Petrobras (the single largest index weight), and the S&P 500 closed green (+0.56%) despite the hawkish minutes. Foreign inflows into Brazil have exceeded R$33B year-to-date through Feb 11 — more than the entirety of 2025 — and the structural rotation into EM remains in place. On the bear side: a stronger DXY (97.73) typically pressures EM currencies, the hawkish Fed minutes reduce the probability of aggressive BCB cuts, and the oil spike — while good for Petrobras — is bad for inflation expectations and for sectors like airlines and transport.
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Net assessment: The Ibovespa is likely to open mixed-to-slightly-higher, with Petrobras providing an upside anchor (+2–3% possible on the Brent move) and Vale trading sideways as iron ore is flat and Chinese markets remain shut. Rate-sensitive names (banks, real estate) face headwinds from the hawkish Fed repricing. Watch volumes — the first full session post-Carnival will reveal whether the foreign flow engine is still running or whether the rates recalibration triggers a pause.
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Key Facts
—Support. 185,001 (Wed intraday low) → 183,662 (Feb 13 low) → 181,987 (BB Investimentos support). Resistance: 187,657 (Wed intraday high) → 190,561 (all-time intraday high, Feb 11). RSI at ~73/66 suggests the index is approaching overbought territory. Ágora flags the 190,000 area as “relevant resistance” that capped the rally last week. The bull trend holds above 183,000.
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Road to March Copom
\n26 days to go — the Fed just made Galípolo’s job harder
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The hawkish FOMC Minutes complicate the BCB’s easing calculus. The Selic-Fed Funds spread is a key constraint: with the Fed now openly debating hikes rather than cuts, the BCB faces a narrower window for its own easing cycle. The Focus survey (released during Carnival) held the 2026 IPCA forecast near 3.97–3.99%, inside the 4.50% ceiling, and the year-end Selic consensus at 12.25% (implying ~275bps of cuts from 15%). But Wednesday’s oil spike to $70.35 — a level not seen since January 30 — threatens to push inflation expectations higher if sustained. And the DXY at 97.73 puts pressure on the BRL, which weakened to 5.249.
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Key inputs remaining before March 17: Friday’s delayed Q4 GDP and PCE data from the U.S., the February IPCA-15 preview (early March), and any fiscal noise from Brasília. The oil trajectory is now critical — if Brent sustains above $70, domestic fuel prices and energy costs could become a risk to the disinflation story.
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Key Facts
— The March rate cut remains the base case, but the odds of a cautious 25bp start (vs. XP’s 50bp base case) strengthened overnight. The hawkish Fed + oil spike combination is exactly the kind of external shock that would push Galípolo toward caution. A 25bp cut on March 17 with dovish forward guidance — signaling 50bp in May if conditions improve — is emerging as the consensus path. Watch the BRL and oil closely over the next two weeks; both are now swing variables for the Copom decision.
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Economic Calendar
\nThursday, February 19, 2026
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| Time (ET) | Event | Impact |
|---|---|---|
| All Day | Holidays: China & South Korea (Lunar New Year continues) — no iron ore price discovery from Dalian | HOLIDAY |
| 10:00 | B3 Full Session Opens (pre-opening 9:45 AM BRT, trading 10:00 AM–5:30 PM BRT) \nFirst normal session since Feb 13. Volume recovery is the key metric. |
OPEN |
| 07:00 | Brazil — IBC-Br Economic Activity (Dec) \nMonthly GDP proxy. Consensus −0.45% | Prev +0.70%. Key input for March Copom calculus. |
HIGH |
| 08:20 | FOMC Member Bostic Speaks \nFirst Fed speaker after hawkish minutes — market will parse tone closely. |
MEDIUM |
| 08:30 | U.S. Data Dump: \n▸ Initial Jobless Claims: Cons 223K | Prev 227K \n▸ Philly Fed Manufacturing (Feb): Cons 7.5 | Prev 12.6 — watch Prices Paid (prev 46.9) \n▸ Trade Balance (Dec): Cons −$55.5B | Prev −$56.8B \n▸ FOMC Member Bowman Speaks — known hawk, watch for rate-hike rhetoric |
HIGH |
| 09:00 | FOMC Member Kashkari Speaks | MEDIUM |
| 10:00 | U.S. Pending Home Sales (Jan) + Leading Economic Index (Dec) \nPending: Cons +1.4% | Prev −9.3%. LEI: Cons −0.2% | Prev −0.3%. Rate-sensitive housing gauge post-hawkish minutes. |
MEDIUM |
| 10:00 | Mexico — Banxico Monetary Policy Minutes \nLatAm rate path signal. Watch for hawkish-dovish split amid peso volatility. |
MEDIUM |
| 10:30 | Fed’s Goolsbee Speaks \nDovish-leaning member — could counter the minutes’ hawkish tone. |
MEDIUM |
| TBD | Argentina — Trade Balance (Jan) \nMedian forecast $900M surplus | Prev $1.89B (Dec). 26th consecutive positive month expected. Milei’s export push + import contraction. |
MEDIUM |
| 12:00 | EIA Weekly Crude Oil Inventories \nCons +1.7M bbl | Prev +8.53M. API showed surprise draw. Confirmation would extend Brent above $70. Arrives mid-B3 session. |
HIGH |
| Fri | Lookahead: U.S. Q4 GDP Advance + PCE Price Index + Feb PMIs (Friday) \nFriday is the week’s real heavyweight. PCE is the Fed’s preferred inflation gauge; a hot number would cement the hawkish tilt. |
HIGH |
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Key Facts
—IBC-Br at 7:00 ET. sets the local tone — a weaker-than-expected reading would reinforce the case for March rate cuts despite the hawkish Fed. The 8:30 ET data dump (Claims + Philly Fed + Trade Balance + Bowman speaking) is the pre-market wave. Then four Fed speakers (Bostic, Bowman, Kashkari, Goolsbee) are spread across the morning, each capable of moving Treasuries as markets parse the minutes’ rate-hike language. The EIA crude report at 12:00 ET (1:00 PM BRT) is the session’s swing event — it arrives mid-B3 and could amplify or reverse the morning’s oil-driven moves. Argentina’s trade balance and Banxico’s monetary policy minutes add LatAm color. Friday’s Q4 GDP and PCE data loom as the week’s finale.
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LatAm Markets Snapshot
\nWednesday, February 18 close
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| Index | Level | Wed Chg | RSI (daily) | Status |
|---|---|---|---|---|
| Ibovespa | 186,016 | −0.24% | ~66 | FULL SESSION |
| S&P/BMV IPC | 70,885 | −0.38% | ~61 | near ATH |
| MSCI COLCAP | 2,366 | +0.17% | ~52 | neutral |
| S&P IPSA | 10,864 | −0.26% | ~41 | weakening |
| MERVAL | 2,723,175 | −3.30% | ~31 | selloff |
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Argentina’s MERVAL was the standout loser, dropping 3.3% with RSI plunging to 31 — deep oversold territory. Chile’s IPSA is also weakening (RSI 41). Mexico’s IPC held near ATH levels but slipped 0.38%. Colombia’s COLCAP was the only green marker at +0.17%. The EM rotation thesis is being tested by the hawkish Fed repricing — today will show whether LatAm can hold its gains or whether the “higher-for-longer” narrative triggers profit-taking across the region.
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Commodities & FX Deep Dive
\nOil explodes, gold holds, dollar surges
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Oil: The story of the day. Brent surged $2.93 to $70.35 (+4.35%), the highest settlement since January 30. WTI jumped $2.86 to $65.19 (+4.59%). The late-session spike was triggered by media reports that Israel raised its alert level on “increased indications of a possible attack on Iran by the U.S.” VP Vance told Fox News that Iran had failed to meet core U.S. demands. Iran’s Revolutionary Guard had already conducted Strait of Hormuz drills earlier in the day, briefly closing parts of the waterway that carries roughly one-third of all waterborne crude. The API reported a surprise inventory draw (vs. expectations of a 2.1M barrel build) — the EIA confirmation at 12:00 ET today is critical. Eurasia Group’s 65% probability of U.S. military strikes by April is now the base case for oil traders. For Petrobras, $70 Brent is comfortable and provides dividend upside.
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Iron Ore: Largely flat at ~$100/t, stuck in a holding pattern as Chinese markets remain closed for Lunar New Year through February 23. Singapore-traded futures are showing modest resilience. Vale‘s Q4 results were operationally strong (EBITDA +17% YoY) despite the $3.8B accounting loss, but the stock’s near-term direction depends on China’s return. Chinese port inventories remain at elevated levels (160M+ tons) and Simandou supply will weigh structurally. Range: $95–$105 until China reopens.
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Gold: Spot gold traded around $4,918, stabilizing after the sharp $5,100-to-$4,867 correction earlier in the month. The hawkish FOMC Minutes and stronger dollar pressured gold intraday, but geopolitical risk (Iran, Russia-Ukraine) provided a floor. China’s central bank has now purchased gold for 15 consecutive months. Gold is +4.8% YTD despite the volatility.
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DXY / BRL: The Dollar Index surged to 97.73 (+0.59%), its highest level since the hawkish Warsh nomination in late January. Strong economic data (Housing Starts beat, Durable Goods beat on core, Industrial Production strong) combined with the hawkish minutes to fuel the move. The BRL weakened to 5.249 (dólar futuro), erasing some of its recent gains. The carry trade (15% Selic) remains attractive on absolute terms, but the DXY momentum is a headwind. If the dollar index pushes above 98, the 5.30 level becomes a risk for USD/BRL.
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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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Petrobras surge — Brent at $70.35 could push PBR +2-3%, anchoring Ibovespa \n Foreign flow engine — R$33B+ YTD inflows dwarf all of 2025; structural EM rotation intact \n S&P 500 green — U.S. equities absorbed hawkish minutes without selling off \n EIA confirms API draw — extends oil rally, further boosts energy names \n |
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Hawkish Fed repricing — rate-hike talk pressures EM currencies and rate-sensitive sectors \n DXY above 98 — would pressure BRL toward 5.30, eroding carry trade appeal \n Iran escalation spiral — 65% strike probability; oil above $75 would reignite inflation fears \n Palo Alto -10% contagion — AI disruption narrative extends to broader tech/SaaS, hitting EM beta \n |
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Positioning for the Session
\nTactical considerations for Thursday’s full session
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This is the session that actually matters. Yesterday’s abbreviated post-Carnival session was a warm-up. Today is the real return — a full session where institutional flows can execute, where volumes should normalize, and where the market digests three major overnight developments simultaneously: hawkish FOMC Minutes, a 4% oil spike, and the Palo Alto aftershock. The opening print will be noisy — expect sector rotation rather than a broad-based move.
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Key watches: (1) Petrobras opening — the oil spike happened after B3 closed yesterday, so today’s session must price it in. A 2–3% gap-up is the base case. (2) Vale reaction — the Q4 earnings were released Feb 12 but the post-Carnival session was too thin to fully digest them. Today’s volume-backed reaction matters. (3) USD/BRL intraday — if the dollar strengthens further toward 5.30, expect defensive positioning in rate-sensitive names. (4) EIA crude data at 12:00 ET (1:00 PM BRT) — arrives mid-session and could amplify or reverse the morning’s oil-driven moves.
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Key Facts
— The Ibovespa’s structural bull case — rate cuts ahead, massive foreign inflows, weakening dollar — took a hit overnight but is not broken. The Fed is more hawkish than expected, but it is still holding at 3.50%–3.75%, not hiking. Oil at $70 is a net positive for Brazil’s biggest index constituent. Foreign flows at R$33B+ YTD are extraordinary and don’t reverse on a single set of meeting minutes. The risk is that today’s session becomes a “sell the rally” opportunity for those who rode the Carnival gap trade. Watch volumes: if turnover exceeds R$25B, the bull case holds. If it falls below R$18B, traders are stepping aside — and that’s the warning sign.
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Related coverage: Ibovespa session | dollar-real exchange rate
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