Brazil Daily Briefing

Gerdau's 7.2% surge is the biggest single-day move among Brazilian large-caps today and signals that the global steel recovery narrative is finding buyers in LatAm. Gerdau operates steelmaking capacity in Brazil, the US, and LatAm with integrated scrap recycling — a business model that benefits when US construction activity (which is holding up given strong JOLTS labor data) and Brazilian infrastructure investment both support demand. Today's move brings Gerdau's year-to-date performance in line with Vale's commodity recovery and validates the old-economy rotation thesis.

Nubank's 8.2% decline is severe and tells you the market is repricing EM fintech valuations in an environment of higher-for-longer US rates. Nu trades at a premium to Itaú and Bradesco on a growth-multiple basis, and when the dollar strengthens and EM risk sentiment deteriorates, that premium compresses fastest. The underlying business remains strong — Nu's credit card and banking revenue growth is among the best in LatAm — but the valuation reset is a market structure event, not a fundamental one. Selic rate at 10.75% means Brazilian cost of capital remains restrictive for growth-multiple names.

Brazil's banking federation Febraban has responded to US criticism of the PIX instant payment system, defending it as an open and fair infrastructure rather than a competitive barrier to US financial firms. The PIX controversy is a trade-friction flashpoint that has emerged as part of broader US-Brazil economic negotiations. For Brazilian banking investors, a maintained PIX framework (no forced structural changes) is positive for Itaú, Bradesco, and Nu — all of which benefit from PIX's high transaction volumes and low per-transaction costs.