Dollar closes higher, and Stock Exchange ends stable trading session with Focus and the Middle East on the radar

This week, investors are also following the Copom meeting (Central Bank Monetary Policy Committee), which defines the basic interest rate on Wednesday (5).

The DXY index, which measures the dollar's performance against a basket of six strong currencies, closed close to stability, up 0.01%.

Ibovespa ended the session in stability, at 178,000 points. Throughout the day, the index's performance was pressured by the shares of Vale and Petrobras, companies with the greatest weight in its composition. The oil company's shares fell 0.85%, quoted at R$43.05, while those of the mining company fell 2.14%, to R$74.64.

According to Otávio Araújo, senior consultant at ZERO Markets Brasil, the sharp drop in oil prices put pressure on Petrobras shares and limited a more consistent advance in the Ibovespa. For the expert, the devaluation of the commodity improves the mood of global markets by reducing the perception of geopolitical risk and alleviating inflationary pressures, but, at the same time, it weighs on the state-owned company's shares.

At 5:07 pm, a barrel of Brent oil was trading at US$83.75, down 7.07%.

Oil lost strength after signs of a possible reduction in tensions in the Middle East. Over the weekend, United States President Donald Trump said the country had suspended new attacks on Iran in pursuit of a quick agreement to halt Tehran's nuclear ambitions and reopen the Strait of Hormuz.

According to Trump, Iran and other countries in the region requested a pause in offensives to conclude the agreement that would lead to the "immediate, complete and total" reopening of the strait and the "end of the Iranian nuclear threat". The statement was published on the Truth Social network after a call with the Crown Prince of Saudi Arabia, Mohammed bin Salman, a US ally.

This Monday, Trump also stated that he "wants to give Iran every last chance before decapitation", after saying that the country's regime is sending mixed signals and needs to choose between an agreement or "total surrender".

Hours later, the American president said that negotiations "are taking place" and argued that "this is the last chance for them to sign a good document" of agreement. "I hope Iran comes to its senses," he said.

The statements came after Tehran stated, earlier on Monday, that there are no ongoing negotiations with Washington, contradicting Trump's statements over the weekend.

On Wall Street, the main stock markets ended the day higher, also driven by signs of a reduction in tensions in the Middle East. The S&P 500 advanced 1.49%, the Dow Jones rose 1.32% and the Nasdaq gained 2.13%.

Bruno Yamashita, allocation and intelligence coordinator at Avenue, states that, in the coming days, the American market should closely monitor the release of data on the job market in the United States.

In addition, the week will also be marked by some balance sheets, with results from SpaceX, Eli Lilly (manufacturer of Mounjaro), as well as other large companies in the consumer, industrial and pharmaceutical sectors.

On the domestic agenda, one of the highlights was the release of the new Focus bulletin. For the first time since March, economists reduced their projection for the basic interest rate at the end of this year. Now, the expectation is that the Selic will end 2026 at 13.75%, a drop of 0.25 percentage points compared to last week's survey.

Furthermore, the projection for inflation in 2026 decreased from 5.12% to 5.03%.

"The combination reinforces the perception that the disinflation process is still ongoing and opens space for a less restrictive monetary policy", says Olívia Flôres de Brás, CEO of Magno Investimento.

The expert highlights, however, that the projection for GDP in 2026 remained at 1.99%, while the estimate for 2027 was revised from 1.60% to 1.57%. “The market continues to see an economy that is resilient, but still far from a more robust expansion cycle,” he says.

With the Copom meeting scheduled for this Wednesday (5), Olívia assesses that the revision of the Selic projection in Focus reinforces the expectation of a 0.25 percentage point cut in the rate, although accompanied by a speech that is still cautious given the fiscal and electoral scenario.

Throughout the week, investors are also following the corporate earnings season, which can increase market volatility. Among the main highlights are the results of Itaú, Bradesco and Petrobras.

With the new perspectives for the conflict in the Middle East, the futures interest rate market ended the session falling. At 5:15 pm, the DI (Interbank Deposit) rate for January 2028 was at 13.805%, with a decrease of 0.05 percentage points. The contract for January 2035 closed at 14.415%, a drop of 0.23 percentage points.

In the United States, the ten-year Treasury yield fell 1.03%, to 4.68%.