Optimism with social security prevails and Ibovespa surpasses 94,000 points against global bad mood

SÃO PAULO – The bad mood prevailing on the world stock markets weighed heavily in trading at the opening of the trading session, but Ibovespa quickly adopted the uptrend, exceeding the 94,000 points with the optimism of pension reform in force.

In this context, the Ibovespa rose by 0.36%, reaching 93,992 points, after the maximum of 94,144 points. The dollar futures maturing in February 2019 were up 0.42% to R $ 3,730 and the commercial dollar was up 0.30% to R $ 3,725.

dollar against the real is due to the general weakening of the currencies of emerging countries after the publication of data below the expected trade balance of China.

The future interest rate market shows little oscillation. The contract expiring in January 2021 went from 7.44% to 7.42% and the future interest rate contract for January 2023 went from 8.47% to 8.48%.

Chinese imports and exports recorded an unexpected decline of 4.4% and 7.6%, respectively, in the largest monthly decline in two years. Yet, in the middle of the trade war, China's trade surplus against the United States rose by 17%.

China's figures fear that they are not only the mirror of commercial transactions, but that they tend to persist, the decline being linked to the slowing of economic growth world and the solution.

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US Treasury Secretary Steven Mnuchin said the next round of trade talks with China is likely to take place in January and it is hoped that Chinese Vice Premier Liu He will lead a delegation to Washington "later this month".

The disappointment caused by the Chinese figures also affects the declining European stock markets, highlighting Pandora's shares, which fall as much as 7% after Morgan Stanley reduced the target price of the society.

Brexit fears also weigh in the mood of investors. The agreement proposed by British Prime Minister Theresa May is to be voted in Parliament on Tuesday (15). A big defeat is to be expected, critics from all sides – the opposition and the pro-Europeans calling for a new referendum – and the proposed agreement is unpopular.

The future Wall Street indexes also drop sharply in the face of Brexit concerns, the closure and slowing down of economies, as evidenced by the Chinese trade balance.

The closing of the United States Government arrived on Monday (14) at its 24th day, becoming the largest in the history of the country.

The problem arises because President Donald Trump wants a project that allocates more than $ 5 billion in funding. the construction of the wall between Mexico and the US budget. On the other hand, the Democrats do not accept this expense and they defend the need to strengthen the security of the border and not build a wall.

Trump hit the foot and said he was already prepared for the interruption to last for months or even years. if needed. On the other hand, Democrats are equally adamant about the budget, which means that the closure can last a very long time.

The fact is that this tends to affect more and more the US economy. On Wednesday, the rating agency Fitch announced that it could even lower the AAA American rating if the problem went too far.

Oil prices fall below $ 60, which affects the weakness of Chinese data. The second day of decline is also related to uncertainties related to the reduction in OPEC production in order to offset the rise suffered in the United States.

The proposal for reform of social security, true to the balance of companies in the Brazilian financial market, continues. Another important problem that civilian minister Onyx Lorenzoni confirmed for next week is the decree facilitating the acquisition and possession of weapons by ordinary citizens, one of Jair Bolsonaro's campaign promises. . [19659021] Highlights of the Stock Exchange

The highest increases among the shares that make up the Ibovespa are as follows:

+11.73

Pension Reform

The pension reform proposal that should be presented to President Jair Bolsonaro is expected to generate in 10 years an economy greater than the original text presented by the government. Former President Michel Temer was introduced to Congress at the end of 2016, estimated at R $ 802.3 billion, according to the newspaper Valor Econômico. The economy can reach the trillion dollars, but it still depends on the adjustments that will be made until next week, when the version negotiated with the Civil House will be transmitted to Bolsonaro.

The proposal being finalized is closer to the idea presented by the group. coordinated by the former president of the Central Bank, Arminio Fraga, also taking into consideration Temer's text approved by the House Special Committee in 2017. Other proposals are also under study in the construction of the text to be presented to the President

No. In the middle of the road, several categories lobbied for reform to be treated differently, with an emphasis on the military. Given that the category is responsible for large pension deficits, an exception for these professionals will displease the market and open gaps so that other sectors can impose different rules for their pensions.

Economic Diary of the Week

On the national scene, the week announces calm. The highlight is the IBC-Br (Central Banks Activity Index), seen as an overview of GDP, which, according to GO Associados, is expected to record a slight increase of 0.2% in During the month,

Abroad, the big event will take place on Tuesday (15) in the United Kingdom, with the vote on the Brexit agreement leaving the United Kingdom of the European Union. Prime Minister Thereza May is already negotiating with Parliament on Plan B in view of the high risk that the current plan will be defeated.

In recent days, even speculation has emerged in the market that the definitive withdrawal, expected 29 still in Europe, the battery of indicators begins Monday ( 7), with data on trade in the euro area and orders to industry in Germany, an important antecedent indicator of the performance of the main economy of the continent. The country still presents the figures of industrial production Tuesday, in addition to the trade balance, which will also publish its data on the European Union.

Discussions between the United States and China also deserve to be monitored. Commercial War . On the Asian giant, the week also tells Tuesday the figures of the trade balance of December, the price indices for production and production and data of GDP of the last quarter of 2018, the fourth quarter.

[19459109] [19459109] The week must be marked by provisional measures and decrees, with Jair Bolsonaro showing the strength of his pen, as he had already warned during his election campaign.

The President must sign an interim measure that aims to reduce from 17 billion rand to 20 billion rand Social Security losses until December. The Special Secretary for Social Security and Labor, Rogério Marinho, met last week with the Ministers of the Economy, Paulo Guedes, and Onyx Lorenzoni, from the civil household, to discuss the text that promises to lift the siege social security benefits.

Bolsonaro must also sign a decree relating to the mitigation of the possession of weapons in the country. Facilitating citizens' access to the firearm was one of Bolsonaro's main proposals during the election campaign.

Both proposals have spent the last days in final adjustment by the government's technical staff and will reach the Bolsonaro table this week.

Politicians who spoke with the Minister of Economy, On pension reform, Paulo Guedes told the newspaper O Estado de S. Paulo that he warned that the government would only succeed if he found a way to dialogue with Congress.

Since the promise of Bolsonaro. is to give up the decision there, which consists of the exchange of votes by positions and the publication of amendments, what will be the government's negotiating model with the members of Congress? A senator who was with Guedes sums it up: until the new path is discovered, everyone will keep up.

One of the ways for the government not to be held hostage by Congress is to seek the support of the people. The idea is to take advantage of the president's notoriety in social networks to convince voters to instruct congress members to vote on proposals.