🔆 BUYSIDEBRAZIL | WEEKLY REPORT Inflation in Brazil and the United States reflects the war in the Middle East – 05/15
✅ In Brazil, April’s IPCA came in line with expectations, but with a qualitatively more pressured composition, especially in core services and food, maintaining concerns over second-round effects from higher fuel prices. On the activity side, data showed mixed signals: retail sales remained resilient, supported by the labor market and wage bill growth, while services continued to point to a sharper slowdown, particularly in household-related and transportation segments. Amid rising uncertainties linked to the war in Iran and increasing domestic political noise, the scenario reinforces the Central Bank’s cautious stance and increases market sensitivity to political and external developments.
✅ In the United States, inflation data showed the impact of the oil shock in both CPI and PPI, still concentrated in energy and mobility-related services, but requiring caution from the Fed regarding possible second-round effects on prices and inflation expectations. Activity remains resilient, with retail sales still positive, although at a more gradual pace and with a less favorable composition.
✅ However, the main focus remains geopolitics, with the war in Iran keeping global uncertainty elevated. Donald Trump’s visit to China contributed to a more cautious tone in diplomatic discussions, while the United States and China converged on defending Iranian nuclear non-proliferation and maintaining maritime flows through the Strait of Hormuz.
