Worse-than-expected data in the US and signs that China may cut a benchmark rate to support the economy have put global investors on the defensive for now.
An unfavorable technical situation has accelerated the decline in Treasury yields in the United States, says partner and manager of Galapagos Capital, more caution is being imported into domestic markets and explains the higher dollar share in Brazil. helps to do. , Sergio Zanini.
“Markets have begun to give more weight to slightly weaker-than-expected data from US activity, at a time when the next step from the Fed is to announce a withdrawal of stimulus. This worries investors a bit”, says the professional. As a result, the technical position of the agents was attacked, particularly on the US interest rate curve, where the majority was taken (betting on the rise), which generated a generalized stop loss movement.
Zanini stressed that the rapid and sharp fall in US interest rates is in line with a global recession that is “not seen in the numbers” of the real economy. Still, he thinks, “it is an important thermometer of the financial world that is getting worse and in times like these, investors naturally reduce their allocation to risk”.
For the manager, this great period of global uncertainty and anxiety, even worse than the message China sent today, also carries a warning signal here. Nevertheless, it is possible to see triggers that could help reverse the trend.
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In Brazil, central bank intervention in the exchange rate should help stabilize the currency. Another important point is greater clarity about what the tax reform will be.
“More than political noise – which I consider to be just another noise – the reform project became a major concern for both local and foreign investors, especially the way it was projected. I believe that “As it becomes clear how this will happen, this bad mood improves”, he said.
(With content originally published on Valor Pro, Valor’s real-time news service)
Recession — Photo: Pixabay