Today’s Focus
The B3 floor wakes up this Thursday with a single question: can the central bank cut again in August? The wager splits the market cleanly between a final 25-basis-point reduction and a pause, with no comfortable consensus. A cooler-than-expected mid-month inflation print last session gave the doves a tailwind, but the central bank’s own models still show price expectations drifting above the 3% target, a reality check that keeps the hawks growling.
This tension is the prism through which every domestic trade flows today. The local DI futures curve, which prices future Selic moves, has already flattened as traders scale back dreams of a deep easing cycle. The median year-end forecast for the Selic has crept up to 13.75%, a signal that the market is buying a shallower path. For equities, that means the big banks, utilities, and consumer cyclicals that led Wednesday’s charge are living on borrowed optimism.
Adding a fresh data point to the debate, Brazil’s Getulio Vargas Foundation drops its July consumer confidence index at 11:00 BRT. With the first-quarter economy still running hot on household spending, any dip in confidence would feed the narrative that domestic demand is starting to buckle under still-high borrowing costs. A resilient print, on the other hand, would arm the hawks with evidence that the economy can handle a rate pause without stalling.
