Ibovespa hits record high and closes higher for the 15th time.

Brazil's main stock market index surpasses 158,000 points amid optimism about interest rate cuts.

The Ibovespa closed higher on Tuesday (November 11), at 157,748.60 points, marking its 15th consecutive rise — the longest streak since 1994. During the trading session, the index surpassed the historic mark of 158,000 points for the first time, reaching 158,467.21 points at its best moment of the day.

The gain of 1.60% reflects investor optimism about the possibility of interest rate cuts in Brazil. This expectation is fueled by the slowdown in October's inflation, which reached 0.09% — the lowest monthly level since 1998.

Inflation slows, paving the way for interest rate cuts.

Brazil's National Consumer Price Index (IPCA) accumulated over 12 months through October stood at 4.68%, still above the inflation target ceiling of 4.5%. Despite this, the Central Bank reiterated in its minutes that the data indicate a more benign dynamic than expected.

The Central Bank committee maintained the Selic rate at 15% and signaled its intention to preserve this level for an extended period to ensure compliance with the 3% target. However, it removed from the November minutes the previous section that indicated core inflation above the level compatible with the target—a sign of greater confidence in the disinflation process.

Dollar weakens, attracting capital flows.

The US dollar closed below R$ 5.30, reflecting renewed appetite for Brazilian assets. The interest rate differential between Brazil and the United States — where the rate has been reduced — is attracting US investors to local equities.

Asset managers point out that this combination of high interest rates in Brazil with cuts in the US makes Brazilian stocks more competitive in the international market, explaining part of the positive flow observed in recent weeks.

Central Bank's cautious context

Despite the record figures, the Central Bank maintains a cautious tone. The institution acknowledges that the strong labor market — with record-breaking employment — is primarily putting pressure on service prices, making the balance between growth and inflation delicate.

The government projected a greater slowdown in GDP for 2025, reducing its estimate from 2.31% to lower levels, while the financial market estimates inflation of 4.55% by the end of the year — still above the permitted ceiling.

Photo by Danylo Harmatiy on Unsplash