Brazil’s financial markets navigated a volatile week driven by inflation data, central bank policy signals, and corporate earnings. Key indicators highlighted persistent economic pressures and shifting investor sentiment.
- IPCA-15 inflation rose 0.78% in January, exceeding expectations
- B3’s Ibovespa declined 1.2% for the week
- Petrobras (PETR4) reported a 14% drop in Q4 EBITDA and cut 2026 capex by 20%
- JBS S.A. (JBSF3) posted 21% YoY net income growth and saw 4.3% share gain
- Market pricing indicates 60% probability of a rate hike in upcoming meeting
- Selic rate remains at 10.5% amid inflation-growth trade-off
Brazil’s markets experienced heightened activity as inflation, monetary policy, and corporate performance took center stage. The IPCA-15 index rose 0.78% in January, exceeding expectations and reinforcing concerns about the central bank’s ability to meet its 3% annual target. This data intensified scrutiny on the Banco Central’s next move, with markets pricing in a 60% chance of a rate hike at the upcoming meeting. The São Paulo Stock Exchange (B3) closed the week with the Ibovespa dropping 1.2%, pressured by energy and telecom stocks. Petrobras (PETR4) reported a 14% decline in adjusted EBITDA for the fourth quarter, citing lower refining margins and higher maintenance costs. The company also announced a 20% reduction in capital expenditure for 2026, signaling caution amid global oil price volatility. Meanwhile, JBS S.A. (JBSF3) posted a 21% year-on-year increase in net income, driven by strong export volumes in Europe and improved processing efficiency. The results supported a 4.3% rally in its shares, making it one of the top performers on B3. The company’s guidance for 2026 pointed to sustained growth in international markets despite domestic currency headwinds. These developments underscored a bifurcated market environment: while some sectors demonstrated resilience, macroeconomic challenges continue to weigh on broader investor confidence. The benchmark Selic rate remains at 10.5% as the central bank balances inflation control with economic growth concerns.