Scholarships rise with attention turned to Covid in China; PEC filed, collection and more market issues today

[The Goa Spotlight] Scholarships rise with attention turned to Covid in China; PEC filed, collection and more market issues today

Most Asian markets closed higher, in the same direction as futures indices in the US and European stock markets on Tuesday (29), after growing frustration with China’s Covid Zero policy brought down global markets in the last session.

Chinese health officials have reported efforts to increase vaccination rates for the elderly, which experts say is crucial to reopening the economy.

The Asian giant also saw a drop in the number of daily infections on Monday, the first drop since Nov. 19.

Meanwhile, some market participants are speculating that some kind of Covid Zero policy change could be announced, given pressure from protesters.

On the economic front, investors will pay attention to the speech by Fed Chairman Jerome Powell, tomorrow (30), in search of information about the central bank’s fight against inflation.

Around here, Senator Marcelo Castro (MDB-PI), general rapporteur of the 2023 Budget, filed yesterday in the Senate the Proposed Amendment to the Constitution (PEC) of the Transition, removing Bolsa Família from the spending ceiling for four years.

The PEC is a priority for the elected government, which seeks to guarantee resources before taking office for the first months of management, and is closely monitored by the financial market, due to its impact on public accounts.

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On the economic agenda, the primary result and data on the Brazilian government’s collection in October are out, in addition to the IGP-M and the producer price index.

1. World Scholarships

United States

US futures indices operated higher this Tuesday morning (29), with investors eyeing China amid speculation that the government may make changes to its strict Covid Zero policy. There was no official announcement, but efforts to accelerate vaccination of the elderly are crucial for the easing of measures.

On Monday, leading NY indicators retreated on protests in China and investors anticipating more economic data and comments from Federal Reserve members this week.

On the economic side, consumer confidence data will be released at 12:00 am, while the market awaits the Fed president’s speech tomorrow.

See how the futures markets performed: Dow Jones Futures (US), +0.29% S&P 500 Futures (US), +0.47% Nasdaq Futures (US), +0.73%

Asia

Most Asian stock markets closed higher, with Hong Kong stock rising more than 5%, as the country’s Covid cases on Monday registered their first drop since November 19.

Chinese officials’ call for seniors to be proactive about vaccinations has also helped markets recover.

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The National Health Commission (NHC) pledged in a statement to “accelerate the increase in the vaccination rate for people over 80 and continue to increase the vaccination rate for people aged 60 to 79”.

Low vaccination rates in China, especially for the elderly, have long been considered the reason why the government is prolonging the “covid zero” policy, which sparked strong protests in the country over the weekend.

Shanghai SE (China), +2.31% Nikkei (Japan), -0.48% Hang Seng Index (Hong Kong), +5.24% Kospi (South Korea), +1.04%

Europe

European markets moved higher on Tuesday as investors continued to monitor news about China’s Covid restrictions.

In indicators, the market awaits the release of the consumer price index (CPI) from Germany.

FTSE 100 (UK), +0.82% DAX (Germany), +0.19% CAC 40 (France), +0.33% FTSE MIB (Italy), +0.25%

Commodities

Oil prices rise on easing concerns about slowing demand for fuel in China, the top oil importer, amid speculation about possible relaxations in the country’s Covid Zero policy after protests.

It should also be noted that, the day before, rumors of an OPEC+ production cut offset concerns about strict Covid-19 restrictions in China, causing WTI to end the trading session in the positive.

Iron ore prices in China are also on the rise, registering a fourth consecutive increase, driven by hopes of recovery in demand for the commodity while China is taking measures to support the struggling real estate sector.

WTI Crude Oil, +2.10%, at $78.86 a barrel Brent Oil, +2.40%, at $85.19 a barrel Iron ore traded on the Dalian exchange rose 2.26% to 770.50 yuan, equivalent to US$107.51

Bitcoin Bitcoin, +1.52% to $16,480.02 (24 hours ago)

2. Schedule

This Tuesday (29), the Brazilian government’s primary result for October will be released, in addition to inflation data measured by the IGP-M index and the IPP (producer price index).

The General Register of Employed and Unemployed People (Caged) is also expected for today, at 9:30 am.

In China, the Purchasing Manager’s Index (PMI) is expected to be released.

Brazil

8 am: IGP-M index for November, with deflation of 0.38%, according to Refinitiv estimates

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9am: Producer Price Index for October

9:30 am: Caged October, Refinitiv consensus predicts 238,000 job creation

10:30 am: Federal tax collection for October

2:30 pm: Primary result of the Federal Government in October, consensus Refinitiv estimates surplus of BRL 25.671 billion

USA

12pm: November Consumer Confidence

6:30 pm: Weekly API Oil Inventories

Germany

10am: Preliminary Consumer Price Index for November

Japan

8:50 pm: Industrial production

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China

10:30 pm: PMI

3. Economic news

Haddad denies being invited to take over the Ministry of Finance

Favorite to assume the Ministry of Finance, the former mayor of São Paulo Fernando Haddad (PT) said last night that, at the request of president-elect Luiz Inácio Lula da Silva (PT), he will join the group of economists in the government of transition from tomorrow and that you have not received any other invitation.

“I was invited exclusively to interact with the economics group that made the transition here, I did not receive any other invitation”, declared Haddad as he left the Centro Cultural Banco do Brasil (CCBB), where he was meeting with the PT leadership. “The president asked me to follow the meetings of the economy group as much as possible,” he added.

4. Political news

PEC of the Transition is filed in the Senate and needs 27 signatures to be processed in the house

The Transition PEC was finally filed yesterday in the Federal Senate. Despite intense negotiations in Brasilia, the version of the proposal registered in Congress does not find consensus among parliamentarians.

The protocoled version of the PEC contains points that have been much questioned by deputies and senators in recent days, such as the guarantee of fiscal space of R$ 198 billion outside the spending ceiling to cover campaign promises of the elected government of Luiz Inácio Lula da Silva (PT) in 2023 and the withdrawal of Bolsa Família for four years from the fiscal rule.

To start processing in the legislative house, the PEC needs at least 27 signatures − that is, the equivalent of 1/3 of the members. Considering the current number of signatories, the government still needs 15 parliamentarians to sign the text, which Castro hopes to get until tomorrow (29).

Covid

Brazil recorded 41 deaths from covid-19 in the last 24 hours on Monday, totaling 689,601 since the beginning of the pandemic.

With that, the moving average of deaths in the last 7 days is 77. Compared to the average of 14 days ago, the variation was +132%, indicating an upward trend for the eighth consecutive day.

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In total, the country recorded 17,710 new diagnoses of Covid-19 in 24 hours, completing 35,229,745 known cases since the beginning of the pandemic.

5. Corporate Radar

Itaú Unibanco (ITUB4)

The Board of Directors of Itaú Unibanco (ITUB4) approved the payment of interest on own capital (JCP), in theamount of R$0.48618 per share, with withholding income tax of 15%, resulting in net interest of R$0.413253 per share, which will be paid until April 28, 2023.

Shareholders registered in the bank’s share base on December 8, 2022, with their shares traded “ex-right” as of December 9, will be entitled to the proceeds.

Locate (RENT3)

The Board of Directors of Localiza (RENT3) approved the 22nd issue of simple debentures, not convertible into shares, with an additional personal guarantee from Localiza Fleet, in a single series, with restricted distribution efforts, in the amount of up to R$ 2.450 billion.

The proceeds obtained by Localiza with the offering will be used for cash replenishment.

Vibra Energy (VBBR3)

Vibra Energia (VBBR3) informed on Monday that its Board of Directors elected Ernesto Pousada for the position of president of the company, according to material fact.

Pousada, who has been acting as CEO of the logistics company VLI since November 2019, will take office until February 1, 2023 and his term of office will be two years.

Until the effective ownership of Pousada, the position of President of the Company will continue to be held on an interim basis by André Corrêa Natal, current Executive Vice President of Finance, Purchasing and IR of the Company.

(With Estadão, Reuters and Agência Brasil)