🔆 BUYSIDEBRAZIL | WEEKLY REPORT
Geopolitical uncertainty remains at the center of attention, while Brazil stands out for the resilience of activity – 04/02
✅ In the United States, the week was marked by a lighter data calendar, with retail sales as the highlight, reinforcing the perception of resilient activity , albeit with sectoral heterogeneity. However, the main market driver remained the escalation of tensions in the Middle East, with a more hawkish speech by Donald Trump increasing risk perception and pressuring markets. The combination of elevated geopolitical uncertainty and still-solid activity supports our view that the Federal Reserve will keep interest rates unchanged throughout the year.
✅ In Brazil, activity data continue to point to a gradual slowdown, still with relevant resilience in the labor market , as evidenced by a robust Caged print. On the other hand, tighter credit conditions, high delinquency, and elevated household indebtedness help explain the lack of a stronger consumption response, while industry and construction remain more sensitive to interest rates. Industrial production came slightly above expectations, but largely explained by base effects, reinforcing a scenario of gradual loss of momentum, with no significant changes to the baseline outlook.
