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Noisy domestic environment negatively impacts the market and intensifies uncertainties about meeting the fiscal target – 10/18

 

In a week relatively lacking in domestic economic data, the attention was focused on fiscal issues, at a time when the government is seeking to reduce expenses and promote structural spending cuts. The proposal to remove state-owned companies from the Federal Budget sparked narratives of fiscal maneuvering by the government. Finance Minister Fernando Haddad had to clarify that there would be no removal of state-owned companies from the framework and that the proposal aims to make these companies less dependent on the Treasury, which would be positive for public accounts. However, it is first necessary for these state-owned companies to find other ways to finance themselves.

In the United States, retail data continues to support the view of a soft landing. In China, the announcement of fiscal stimuli, although positive, raised doubts about the amount to be implemented.

 

For more information, please check our Weekly Report 86.

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