In brief
The day combined three vectors: BofA resumed recommending Brazil, polls showed a tied runoff and foreigners, who pulled R$ 18 billion in August, came back to buy.
The result was the Ibovespa's highest close since May and the lowest dollar in a month.
What we know
06Verified fact · material
Bank of America upgraded Brazilian equities from marketweight, held since June, to overweight on September 8, citing slowing activity and lower inflation that allow a deeper rate-cutting cycle, with the Selic projected at 11.25% by end-2027, from 12.75%, per InfoMoney and Money Times.
It is the day's trigger, affecting flows and allocation.
Verified fact
Foreign flow on B3 was positive by R$ 3.9 billion in September's first three sessions, R$ 1.7 billion on September 3 alone, after a net R$ 18.1 billion outflow in August; BofA counts R$ 6 billion of cash-market inflows over ten days, a different cut, per InfoMoney.
Shows the flow reversal behind the rally.
Sources[07]Verified fact
Rate futures fell: the January 2029 DI closed at 13.815%, from 13.885%, and the January 2036 DI at 14.015%, from 14.20%, per Money Times.
Shows the effect on the yield curve.
Sources[08]
Transmission to assets
Market read-through
Markets did not buy an election outcome, they bought lower rates: BofA justifies the upgrade by the Selic, not the ballot box.
As long as foreigners reverse August, the Ibovespa has support, but the thesis depends on the September 16 Copom and on oil near US$ 100 not feeding inflation.
Portfolio impact
03A global bank upgrade and returning foreign flows support the index in rate-sensitive stocks.
Positive while the rates thesis holds.
What would change the view: Depends on the Copom confirming the cutting path and on flows persisting.
Foreign equity inflows push the dollar down.
Negative for the dollar, positive for the real.
What would change the view: Reverses with polls that separate a candidate or with an external shock.
The bet on an 11.25% Selic in 2027 pulls the long end down.
Rate futures falling.
What would change the view: Depends on fuel inflation and the Copom.
Direction is an explanatory hypothesis, not a forecast or recommendation.
Next signals
What to watch
- The September 15-16 Copom.
- B3's daily foreign flow.
- Upcoming election polls and their effect on the currency.
Limits of the reporting
What remains uncertain
- BofA's R$ 6 billion and B3's R$ 3.9 billion measure different windows and markets.
- Seu Dinheiro describes the BofA move as neutral to buy; InfoMoney as marketweight to overweight, the same scale.