Treasury Direct: in the face of strong volatility, public bond negotiations are suspended

On the return of the weekend, the negotiations of public securities in the Direct Treasury were suspended on the afternoon of this Monday (18), around 2:20 pm. With this, investors can only buy and sell securities such as the Selic Treasury.

The suspension is due to the strong fluctuation in prices and fees. When this occurs, the Treasury temporarily suspends sales and purchases to prevent the investor from temporarily closing how transactions at a price that can quickly lag. Last week, Treasury Direct also stopped trading in the face of strong volatility.

Before the suspension, in the first update of the day, the highest return among the fixed rate was delivered by the paper maturing in 2025, which offered 12.33%, slightly above the 12.31% seen last Thursday (14), as that there was no session on Friday (15) due to the holiday.

Among the bonds linked to inflation, the highlight is the Treasury IPCA+2055 with a half-yearly coupon. At 9:20 am, the actual remuneration delivered by him was 5.77%, a percentage higher than the 5.73% recorded previously.

In the international market, investors monitor the advance of oil and concerns about global inflation. Here in Brazil, the market is attentive to the numbers of the General Price Index – 10 (IGP-10), which increased 2.48% in April, driven especially by the rise in fuel prices. It is also noteworthy that the rise in prices is increasingly widespread.

In addition, investors monitor the participation of Roberto Campos Neto, president of the Central Bank, in a panel of the International Monetary Fund (IMF), this afternoon.

China data and commodities

One of the highlights of the session is the data from China. China’s Gross Domestic Product (GDP) rose 4.8% in the first quarter of 2022 compared to the same period a year ago, the country’s National Bureau of Statistics (NBS) reported.

The result surpassed the projections of economists consulted by the Wall Street Journalgrowth of 4.6%, and year-on-year growth of 4.0% recorded in the last quarter of 2021. However, it put the Chinese economy on a path below the official target for this year, of expansion of 5.5% – even if achieved, the percentage would lead the country’s activity to the slowest advance seen in more than 25 years.

At the margin, the Chinese economy expanded by 1.3% in the first quarter of this year, which represents a deceleration compared to the pace observed in the fourth quarter of 2021, when there was growth of 1.6% on that basis.

The data came out along with other indicators of China’s economy: industrial production, with annual growth of 5% in March, as expected; and retail sales, which dropped 3.5% in March, compared to the same period last year. The market was betting on a 2% drop.

Also pay attention to commodities. Oil futures contracts rise on Monday afternoon, with the news that production at one of Libya’s oil fields was interrupted the day before (17). In addition, as the war continues, there is a fear among financial agents that more sanctions on Russia’s oil trade will tighten the supply of the commodity even more.

At around 3:20 pm ET, the Brent contract was trading at $114.33, up 2.35% and the WTI contract was up 2.11% to $109.21.

IGP-10

On a day with a more emptied economic agenda, the highlight is the IGP-10 numbers, which rose 2.48% in April. In the previous month, the index had registered an increase of 1.18%. With this result, the indicator accumulates a high of 7.63% in the year and 15.65% in 12 months.

In the document, André Braz, coordinator of price indices, highlighted that the biggest contribution came from fuels, in addition to the significant rise in the price of fertilizers. The researcher, however, said that inflationary pressures are very widespread.

According to him, even excluding the contribution of gasoline (0.15% to 18.73%) and diesel (0.24% to 24.90%) in the Broad Producer Price Index (IPA), the average variation of the to the producer would be 1.81%, surpassing the variation calculated by the IPA in March.

Guedes at the IMF and accounts in the red

On the political scene, attention is focused on the series of meetings of G20 finance ministers at the International Monetary Fund (IMF).

According to local press reports, Paulo Guedes, Minister of Economy, is going to the United States to sell the idea that Brazil is a “safe harbor” for receiving investments.

“Brazil will be there positioning itself as a solution. The minister has clearly said in recent opportunities that Brazil is a safe haven. We did our homework with domestic renovations and that makes us more resilient to the most adverse and turbulent environment,” a technician from the economic team told the newspaper. The State of São Paulo.

Also noteworthy is the draft Budget Guidelines Law (LDO), which was sent to Congress last Thursday (14th).

At the time, the Ministry of Economy proposed a primary deficit target of up to R$ 65.9 billion for 2023. The primary deficit indicates how much the government should spend above the year’s revenue, not counting public debt expenses.

To honor this additional amount, the Union will have to issue more debt. Once the result is confirmed, this will be the tenth consecutive year of a hole in the public accounts. The trajectory of fiscal deficits began in 2014.