Brazil’s Financial Morning Call for Wednesday, August 26, 2026

The most crucial figure for today's trading on B3 is the August IPCA-15 inflation index, which is set to be released at 9:00 BRT. Economists predict a monthly decline of approximately 0.3 percent, which would bring the 12-month rate from 4.52 percent down to 4.34 percent. This number is noteworthy as it is above the central bank's 3 percent target midpoint but still within the 1.5-4.5 percent tolerance band.

The focus of Copom, Brazil's monetary policy committee, is on whether the Selic rate will experience another quarter-point cut during the September 15-16 meeting. A softer-than-expected inflation print would support this case. The Ibovespa, Brazil's main stock index, has climbed for five consecutive days, with rate-sensitive stocks like Magazine Luiza and Assaí leading the rally.

Investors are advised to prepare for a pause or slight pullback before the release of the data. The direction of the real, Brazil's currency, is also a significant factor to consider. A stronger inflation print would maintain the carry appeal of the currency, while a weaker print might prompt some investors to sell Brazilian assets after recent gains.

The Ibovespa is expected to open with a modest gain after a five-day rally, bringing the benchmark back to its best levels in recent weeks. The real is currently near the 5.15-per-dollar mark, following Tuesday's PTAX fixing of 5.1490. The central bank's benchmark Selic rate remains high enough to attract foreign carry traders, so any movement in inflation expectations will directly impact the currency's movement.

The upcoming data releases, including the central bank's July current account and foreign direct investment figures at 11:30 BRT, and the IBGE's continuous household survey on unemployment on Thursday, could influence the direction of the real after the inflation print. The Copom's decision in September is a major event for all Brazilian asset classes.