Brazil’s Financial Morning Call for September 30 2025

Brazil’s financial markets navigate a complex landscape shaped by robust U.S. foreign direct investment (FDI), trade tensions, energy integration challenges, and judicial reforms.

The U.S. holds a commanding 26.3% of Brazil’s FDI stock, reaching $204.7 billion by 2024, dwarfing China’s modest 6.7% share, signaling strong confidence in Brazil’s market despite global volatility.

However, U.S. Commerce Secretary Gina Raimondo’s call for Brazil to address its trade surplus with the U.S., which hit $30 billion in 2024, highlights frictions that could impact export-driven sectors.

The Itaipu hydroelectric dam dispute, involving a $300 million cost disagreement and corruption allegations, tests Mercosur’s energy integration and could raise power costs, affecting industrial competitiveness.

Meanwhile, Brazil’s new Supreme Court chief, Luiz Fux, pledges to curb solo judicial rulings, aiming to stabilize legal predictability and bolster investor confidence ahead of key economic data releases today.

These developments, combined with today’s critical economic agenda, set the stage for heightened market sensitivity as investors weigh domestic fiscal metrics, global inflation signals, and regional trade dynamics against Brazil’s resilient commodity-driven growth.

Economic Agenda for September 30, 2025

Brazil (10th Largest Economy, Nominal GDP: ~$2.125 trillion)

7:30 AM BRT – Net Debt-to-GDP Ratio (Aug): Consensus: TBD, Previous: 63.7%. Measures public sector debt relative to economic output.

Implication: A stable or declining ratio could signal fiscal discipline, supporting investor confidence and the real, especially amid U.S. FDI inflows ($204.7 billion stock). A rise could pressure credit ratings and increase borrowing costs, challenging retail and infrastructure sectors.

7:30 AM BRT – Budget Balance (Aug): Consensus: -96.100B, Previous: -175.576B. Tracks fiscal surplus/deficit.

Implication: A narrower deficit than July’s 175.576 billion reais could ease concerns over fiscal sustainability, supporting the real and equity valuations, particularly for state-linked firms like Eletrobras, amid judicial reforms enhancing governance predictability.

7:30 AM BRT – Budget Surplus (Aug): Consensus: TBD, Previous: -66.566B. Measures primary fiscal balance.

Implication: A reduced deficit would bolster market sentiment, reinforcing fiscal pledges from Brasília and supporting commodity-driven stocks like CSN Mineração, though U.S. trade surplus demands could weigh on export outlooks.

7:30 AM BRT – Gross Debt-to-GDP Ratio (MoM) (Aug): Consensus: TBD, Previous: 77.6%. Tracks total debt burden.

Implication: A rising ratio could signal debt sustainability risks, pressuring the real and increasing reliance on FDI to finance external deficits, especially with Itaipu cost disputes raising energy price concerns for industries.

8:00 AM BRT – Unemployment Rate (Aug): Consensus: 5.6%, Previous: 5.6%. Measures labor market health.

Implication: Sustained low unemployment at 5.6% supports consumer spending but risks fueling services inflation, complicating Selic rate decisions and pressuring rate-sensitive sectors like retail, while strong FDI inflows bolster long-term growth prospects.

Brazil’s Financial Morning Call for September 30, 2025. (Photo Internet reproduction)
United States (Largest Economy, Nominal GDP: ~$30.50 trillion)

8:55 AM BRT – Redbook (YoY): Consensus: TBD, Previous: 5.7%. Tracks retail sales trends.
9:00 AM BRT – House Price Index (YoY) (Jul): Consensus: TBD, Previous: 2.6%. Measures housing price growth.
9:00 AM BRT – House Price Index (MoM) (Jul): Consensus: -0.2%, Previous: -0.2%. Monthly housing price change.
9:00 AM BRT – S&P/CS HPI Composite – 20 s.a. (MoM) (Jul): Consensus: TBD, Previous: -0.3%. Seasonally adjusted home prices.
9:00 AM BRT – S&P/CS HPI Composite – 20 n.s.a. (MoM) (Jul): Consensus: TBD, Previous: 0.0%. Non-seasonally adjusted home prices.
9:00 AM BRT – S&P/CS HPI Composite – 20 n.s.a. (YoY) (Jul): Consensus: 1.7%, Previous: 2.1%. Annual home price growth.
9:45 AM BRT – Chicago PMI (Sep): Consensus: 43.4, Previous: 41.5. Gauges manufacturing activity.
10:00 AM BRT – CB Consumer Confidence (Sep): Consensus: 96.0, Previous: 97.4. Measures consumer sentiment.
10:00 AM BRT – JOLTS Job Openings (Aug): Consensus: 7.190M, Previous: 7.181M. Tracks labor demand.
10:30 AM BRT – Dallas Fed Services Revenues (Sep): Consensus: TBD, Previous: 8.6. Service sector performance.
10:30 AM BRT – Texas Services Sector Outlook (Sep): Consensus: TBD, Previous: 6.8. Regional service sector sentiment.
11:00 AM BRT – U.S. President Trump Speaks: Commentary may influence market sentiment.
13:30 PM BRT – Fed Goolsbee Speaks: Policy insights from Chicago Fed President.
20:30 PM BRT – Fed Governor Jefferson Speaks: Additional Fed policy perspective.

Implication: U.S. data, particularly consumer confidence and JOLTS, could reinforce or soften expectations of Fed rate cuts, impacting the dollar’s strength (now pressuring USD/BRL at 5.32).

Strong data may exacerbate trade surplus tensions, as U.S. demands for Brazil to address its $30 billion surplus could curb export growth, while softer data might lift risk appetite, supporting Petrobras and Vale.

Europe (Collective GDP of Key Economies: Germany, UK, France, etc.)

2:00 AM BRT – German Import Price Index (MoM) (Aug): Actual: -0.5%, Consensus: -0.2%, Previous: -0.4%. Tracks import cost changes.
2:00 AM BRT – German Import Price Index (YoY) (Aug): Actual: -1.5%, Previous: -1.4%. Annual import price trends.
2:00 AM BRT – German Retail Sales (YoY) (Aug): Actual: 1.8%, Previous: 3.3%. Annual retail growth.
2:00 AM BRT – German Retail Sales (MoM) (Aug): Actual: -0.2%, Consensus: 0.6%, Previous: -0.5%. Monthly retail change.
2:00 AM BRT – UK Business Investment (YoY) (Q2): Actual: 3.0%, Consensus: 0.1%, Previous: 5.8%. Annual investment growth.
2:00 AM BRT – UK Business Investment (QoQ) (Q2): Actual: -1.1%, Consensus: -4.0%, Previous: 4.1%. Quarterly investment change.
2:00 AM BRT – UK Current Account (Q2): Actual: -28.9B, Consensus: -24.8B, Previous: -21.2B. Trade and income balance.
2:00 AM BRT – UK GDP (YoY) (Q2): Actual: 1.4%, Consensus: 1.2%, Previous: 1.3%. Annual economic growth.
2:00 AM BRT – UK GDP (QoQ) (Q2): Actual: 0.3%, Consensus: 0.3%, Previous: 0.7%. Quarterly growth.
3:55 AM BRT – German Unemployment Change (Sep): Consensus: 8K, Previous: -9K. Tracks jobless changes.
3:55 AM BRT – German Unemployment Rate (Sep): Consensus: 6.3%, Previous: 6.3%. Unemployment level.
5:00 AM BRT – Italian CPI (MoM) (Sep): Consensus: -0.1%, Previous: 0.1%. Monthly inflation.
5:00 AM BRT – Italian CPI (YoY) (Sep): Consensus: 1.7%, Previous: 1.6%. Annual inflation.
5:30 AM BRT – German Buba Balz Speaks: Policy commentary.
8:50 AM BRT – ECB President Lagarde Speaks: Policy insights.
9:00 AM BRT – ECB’s Elderson Speaks: Additional ECB perspective.
13:00 PM BRT – German Buba President Nagel Speaks: Bundesbank policy outlook.

Implication: German retail and unemployment data, alongside ECB speeches, could signal Eurozone demand strength for Brazil’s steel and soy exports.

Lagarde’s remarks may hint at ECB easing, potentially easing global yields and supporting Brazil’s commodity margins, though U.S. trade pressures could offset gains.

Other Countries

South Africa (Nominal GDP: ~$0.40 trillion)

2:00 AM BRT – M3 Money Supply (YoY) (Aug): Actual: 6.18%, Previous: 6.75%. Tracks money supply growth.
2:00 AM BRT – Private Sector Credit (Aug): Actual: 5.86%, Previous: 5.84%. Measures credit expansion.
8:00 AM BRT – Trade Balance (Aug): Consensus: TBD, Previous: 20.29B. Tracks trade surplus/deficit.

Implication: Stronger South African trade data could support regional demand for Brazilian machinery, though Itaipu’s energy cost risks may raise export competitiveness concerns.

Japan (3rd Largest Economy, Nominal GDP: ~$4.10 trillion)

1:00 AM BRT – Construction Orders (YoY) (Aug): Actual: 38.9%, Previous: -19.0%. Tracks construction activity.
1:00 AM BRT – Housing Starts (YoY) (Aug): Actual: -9.8%, Consensus: -5.2%, Previous: -9.7%. Measures residential construction.
19:50 PM BRT – Tankan Large Manufacturers Index (Q3): Consensus: 14, Previous: 13. Gauges manufacturing sentiment.

Implication: Strong construction data could sustain Japan’s demand for Brazilian iron ore, though weaker housing starts may temper commodity flows, impacting Vale’s export outlook.

India (5th Largest Economy, Nominal GDP: ~$3.90 trillion)

6:00 AM BRT – Federal Fiscal Deficit (Aug): Consensus: TBD, Previous: 4,684.16B. Tracks fiscal health.
7:30 AM BRT – RBI Monetary and Credit Information Review: Policy insights.
Implication: Robust Indian fiscal data could fuel demand for Brazilian oil, supporting Petrobras amid U.S. trade surplus frictions.

Why These Events Matter: Brazil’s fiscal data (Net Debt-to-GDP, Budget Balance) will clarify the sustainability of fiscal pledges, critical for maintaining U.S. FDI appeal ($204.7 billion stock) and stabilizing the real at 5.32/USD.

Unemployment at 5.6% supports growth but risks inflation, complicating Selic decisions. U.S. consumer confidence and JOLTS data could shift Fed rate expectations, impacting the dollar and Brazil’s export competitiveness, especially with U.S. demands to address the $30 billion trade surplus.

Eurozone data and ECB speeches influence commodity demand, while Itaipu’s cost disputes and judicial reforms under Fux shape energy and governance outlooks, critical for long-term investor confidence.

Brazil’s Markets Yesterday

Brazil’s Ibovespa climbed 0.61% to 146,336.80 on September 29, 2025, after hitting a record intraday high of 147,558.22, driven by commodity resilience, fiscal pledges from Brasília, and steady global risk appetite ahead of U.S. economic data.

The real strengthened to 5.32 per dollar, supported by a softer dollar and Brazil’s high carry trade appeal. Turnover was moderate, but sectoral divergences were sharp.

Eletrobras led gains, with preferred shares (ELET6) surging 4.3% to R$55.56 and common stock (ELET3) up 3.9% to R$52.68, hitting post-privatization highs above R$50, bolstered by judicial stability signals from Fux’s reforms.

CSN Mineração rose 4% to R$5.52 on metals optimism, and Banco do Brasil gained on fiscal discipline hopes. Braskem slumped 5.1% to R$6.66 after Fitch and S&P downgrades, raising judicial workout fears.

Support lies at 145,000, with resistance at 146,500-147,558, and RSI neutral amid sustained U.S. FDI inflows.

U.S. Markets Yesterday

U.S. markets edged higher on September 29, 2025. The S&P 500 rose 0.3% to 6,661.21, Nasdaq gained 0.5% to 22,591.15, and Dow inched up 0.1% to 46,317.07, while the Russell 2000 was flat at 2,435.25.

Tech, particularly semiconductors, led gains, while energy lagged due to falling oil prices. Investors shrugged off hawkish Fed remarks, focusing on in-line inflation and U.S. government shutdown risks.

The 10-year Treasury yield dipped to 4.14%-4.15%, gold hit $3,800/oz on safe-haven demand, and Brent crude fell to $67.97, with WTI in the mid-$64s. The dollar index softened, aiding gold and easing financial conditions.

Markets braced for today’s consumer confidence and JOLTS data, which could influence Fed rate cut odds and Brazil’s trade surplus dynamics.

Mexico’s Market Yesterday

Mexico’s S&P/BMV IPC rose to a record, gaining 0.9% to 62,472.13 points on September 29, 2025, driven by a softer dollar and resilient growth signals.

The peso held firm at 18.40 per dollar, supported by Banxico’s steady rates and U.S. shutdown jitters. Leaders included Grupo Mexico (+3.1% to 151.56), Alsea (+2.8% to 62.48), and Cemex (+2.5% to 12.45), while Gentera fell 4.8% to 44.85 on credit concerns.

RSI neared overbought at 62, with resistance at 62,500 and support at 61,700, signaling bullish momentum amid Brazil-Mexico trade stability despite Itaipu’s regional energy cost risks.

Argentina’s Market Yesterday

The S&P Merval edged up 0.5% to 1,776,683 points on September 29, 2025, as the blue-chip peso gap narrowed slightly. The official USD/ARS held at 1,339.53, with parallel rates at 1,390.

Loma Negra (+2.8%) and IRSA (+2.5%) led gains, while Edenor (-2.3%) and Metrogas (-2.0%) lagged. RSI at 43 and narrowing Bollinger Bands suggest consolidation, with support at 1,750,000 and resistance at 1,800,000, as fiscal pressures and U.S. trade tensions limit upside.

Colombia’s Market Yesterday

The COLCAP index rose 0.4% to 1,883.24 points on September 29, 2025, supported by cement and food stocks. The peso strengthened to 3,880 per dollar, up 4.5% monthly on oil revenues.

Ecopetrol (+1.3%), Cementos Argos (+1.1%), and Grupo Nutresa (+0.9%) led, while Avianca (-0.8%) dipped. RSI at 60 and bullish MACD signal potential upside to 1,900, with support at 1,854. Brazil’s commodity export resilience supports regional stability, though Itaipu’s energy cost disputes pose risks.

Chile’s Market Yesterday

The IPSA fell 0.9% to 8,959.37 points on September 29, 2025, pressured by quarter-end dollar demand. The peso weakened to 965 per dollar. Falabella (-1.4%) and Banco Santander Chile (-1.2%) dragged, while SQM (+0.7%) gained on lithium.

Copper futures dipped 0.8% on China demand concerns. RSI at 49 and support at 8,850 suggest consolidation, with resistance at 9,100. Brazil’s commodity-driven growth supports regional sentiment, tempered by Itaipu’s energy cost uncertainties.

Commodities

Brazilian Real

The Brazilian real strengthened to 5.32 per dollar on September 29, 2025, supported by a softer U.S. dollar and Brazil’s high carry trade appeal with the Selic rate at 15%. The USD/BRL pair ranged 5.28-5.36, with RSI at 45 neutral.

U.S. FDI inflows ($204.7 billion stock) and fiscal pledges bolster stability, though U.S. demands to address the $30 billion trade surplus and Itaipu cost risks pressure exporters.

Forecasts see year-end USD/BRL at 5.25 if fiscal data improves, with volatility risks from U.S. consumer confidence and JOLTS data today.

Cryptocurrencies

Bitcoin led a cautious rebound to $110,500 on September 29, 2025, with $98.5 million in spot ETF inflows signaling renewed investor interest. Ethereum rose 2.1% to $3,996, Solana gained 3.0% to $199.80, and XRP advanced 2.5% to $2.81.

Brazil’s fintech sector eyes adoption, but high Selic rates and U.S. trade surplus tensions mute retail demand. RSI moved to neutral, with U.S. consumer confidence data pivotal for further gains amid judicial stability boosting market sentiment.

Companies and Market

Industry Outlook

Brazil’s commodity-driven economy benefits from $204.7 billion in U.S. FDI stock and a strengthened real at 5.32/USD, but faces challenges from a $30 billion U.S. trade surplus sparking demands for adjustments, potentially curbing export growth.

The Itaipu dam dispute, with $300 million in cost disagreements, risks higher energy prices, impacting industrial margins. Unemployment at 5.6% fuels consumption but sustains inflationary pressures, keeping Selic at 15%.

Judicial reforms under Fux enhance governance predictability, supporting investor confidence. Today’s fiscal data (7:30 AM BRT) and U.S. consumer confidence/JOLTS (10:00 AM BRT) will steer energy, retail, and export outlooks, with U.S. trade frictions and energy cost risks adding volatility.

Key Developments

U.S. FDI Dominance: U.S. FDI stock in Brazil reached $204.7 billion in 2024 (26.3% of total), far outpacing China’s $52.2 billion (6.7%), driven by investments in manufacturing and tech, bolstering long-term growth despite trade surplus tensions.

U.S. Trade Surplus Pressure: The U.S. recorded a $30 billion trade surplus with Brazil in 2024, prompting Commerce Secretary Raimondo to demand fixes, which could impact agribusiness and manufacturing exports, pressuring firms like JBS and Embraer.

Itaipu Dam Dispute: A $300 million cost disagreement and corruption allegations at Itaipu threaten Mercosur’s energy integration, potentially raising power costs and squeezing industrial margins for firms like CSN Mineração.

Judicial Reforms: Supreme Court chief Luiz Fux’s pledge to end solo judging aims to enhance legal predictability, supporting investor confidence in sectors like banking (Banco do Brasil) and utilities (Eletrobras).

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