Rio Times Global Economy Briefing
The Big Three
Global stocks limp into late August as yields stay high US stocks finished mixed on Monday, with the S&P 500 down 0.28%, the Dow up 0.26% and the Nasdaq off 0.76%, as chip stocks sank on new US sanctions against Iran and the collapse of US–Canada trade talks. This keeps global financial conditions tight for Latin America, raising sensitivity of the real and local bond curves to any fresh bond sell-off.
Yields ease as oil retreats, but the Fed’s bar for cuts stays high US 10-year yields eased to 4.701% as oil prices fell, unwinding part of last week’s supply-driven back-up toward 4.74%. Higher long-end yields raise the hurdle for aggressive Fed cuts, a key driver for capital flows into Brazil and other high-carry LatAm markets.
Brazil’s Ibovespa rides external relief and Selic-cut hopes Brazil’s Ibovespa rose 0.51% to 171,907 points on Monday 24 August, its fourth straight gain, while the dollar edged up to R$5.153, as Vale and the banks led a commodity-and-value bid. Local futures now price room for more cuts after the August Copom meeting kept the door open, with the central bank’s Focus survey now seeing the Selic ending 2026 at 13.75%, one cut below the current 14.00%.
