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Brazil Daily Briefing

Sunday, 26 July 2026

📉 Brazil EWZ -1.2% as Petrobras Sheds 1.5% Against $100 Brent and Banks Falter Ahead of IPCA-15 and FOMC: The Selic Spread Trade Tightens

Brazil's market delivered a broadly negative session, with the iShares MSCI Brazil ETF (EWZ) declining 1.22% to 35.73 — a read that stands out precisely because Brent is near $100 and Petrobras should theoretically be catching a bid. PBR.A -1.54% and PBR -1.21% were among the session's sharpest losers, a disconnect from the commodity price signal that demands explanation. The banking pair compounded the damage: BBD (Bradesco) -1.64%, BBDO -0.93%, while consumer (-0.97%, led by ABEV/Ambev) and fintech (-0.77%) added to the pressure. The sole bright spot was Telecom +1.19% with TIM Brasil (TIMB) as the lone meaningful gainer. iShares Latin America 40 (ILF) fell -0.57% while iShares MSCI Mexico (EWW) +0.60% — the divergence signals Brazil-specific risk is driving the LatAm underperformance, not a regional commodity downtick. The week ahead is data-dense: Brazil's IPCA-15 (the official CPI preview) prints this week, FOMC meets Wednesday, Q2 earnings begin with Vale (VALE3) and Santander (SANB11), and dividends are due from Bradesco and IRB. Separately, Money Times reported R$2.35 billion in net foreign inflows to Brazilian equities in July's first half — a positive flow signal that contradicts today's price action.

By the numbers

iShares MSCI BrazilEWZ

35.73

-1.22%(-0.44)

iShares Latin America 40ILF

34.64

-0.57%(-0.20)

iShares MSCI MexicoEWW

75.45

+0.60%(+0.45)

3 things that moved markets

IPCA-15, Fed Rates, and US GDP: Brazil's Full-Week Macro Agenda

Money Times flagged this week as one of the most data-dense of Q3: IPCA-15 (Brazil's official CPI preview) plus FOMC rate decision plus US GDP print. For Brazilian investors, all three are linked via the BRL/USD channel: a Fed hike widens the Selic-vs-Fed spread (Selic currently at 10.75%), compressing BRL and making commodity export earnings more valuable in reais while raising import costs for consumer names like ABEV. The Copom's next window to respond comes after this week's data barrage, making Wednesday's FOMC the primary catalyst for BRL direction.

Read at Money Times ↗

Vale, Santander, Usiminas, Ambev: Q2 Earnings Season Begins

At least 12 Brazilian companies report Q2 2026 results between July 27-31, headlined by Vale (VALE3), Santander (SANB11), Usiminas (USIM5), and Ambev (ABEV3), per Money Times. Santander's analysts expect Vale to post solid results on iron ore volumes; however, iron ore prices face pressure from China property market uncertainty — creating a potential miss/beat swing in either direction. ABEV3 -0.97% today may be pre-positioning ahead of a cautious Q2 margin read given higher input costs. Santander SANB11's result will calibrate the market's read on whether Brazilian banking sector NIM is holding.

Read at Money Times ↗

Foreign Capital Returns to Brazilian Equities After Two Months of Outflows

Net foreign inflows to the B3 totaled R$2.35 billion in July's first half, reversing two consecutive months of outflows, per Money Times. Analysts describe this as a technical MSCI LatAm rebalancing move rather than a fundamental thesis shift — but the directional reversal matters. This creates a tension with today's price action: if foreign capital is genuinely returning, today's -1.22% in EWZ is a positioning anomaly ahead of a data-heavy week rather than a new trend. BBD at $3.60 (-1.64%) looks particularly interesting as a contrarian read if the foreign flow thesis holds through month-end.

Read at Money Times ↗

Top movers

Gainers (3)

Losers (5)

Sector heatmap

Smart-money note

Petrobras's -1.21%/-1.54% decline on a day when Brent is near $100 is the most anomalous data point of the Brazilian session. Under normal oil-price transmission, Petrobras should be catching a bid near $100 Brent — it didn't, and that deserves a specific read. The most likely explanation is COPOM trajectory uncertainty: if the Fed hikes Wednesday and the Selic rate needs to match, Petrobras faces higher discount rates on its own capex financing even as revenue remains dollar-denominated. BBD -1.64% alongside BBDO -0.93% are consistent with the banking sector pricing a tighter-for-longer scenario that compresses Brazilian loan growth and increases provisioning needs. Interestingly, Nu (Nubank) in the Fintech basket -0.77% — a digital deposit model that typically benefits from higher Selic — still sold off today, suggesting sector-wide EM risk-off rather than name-specific reads. The Dividendos calendar this week includes Bradesco and IRB (IRBR3) — ex-dividend dates that mechanically explain part of the BBD selling pressure. Forward watch: if COPOM signals any divergence from the Fed's path at its next communication — holding while the Fed hikes — that is a positive BRL signal and Brazilian equities should recover sharply on the spread-widening thesis.

What to watch tomorrow

IPCA-15 Print

Brazil's CPI preview this week — an above-consensus print puts COPOM under immediate pressure to consider a Selic hike; BRL/USD reaction within an hour of the print tells you most of what you need.

Vale Q2 Earnings

Vale (VALE3) reports this week — iron ore volume vs price spread is the key line; Santander expects solid results but China property demand uncertainty can swing the miss/beat in either direction.

Petrobras vs Brent Divergence

PBR.A -1.54% on near-$100 Brent is anomalous — if oil holds above $95 through the week, the Petrobras discount should narrow; COPOM language Wednesday is the resolving variable.

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