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1. Ibovespa hits record high, driven by foreign capital and interest rates

The Ibovespa reached two historic records this week. The first was a closing level of 138,963.11 points, marking a daily gain of 1.76%. Additionally, the intraday high hit 139,418.17 points for the first time. The previous record had been set in August 2024.

Experts attribute the surge in Brazil’s stock market to expectations of the end of the interest rate hike cycle in the country, strong inflows of foreign capital, and a temporary truce in trade tensions between China and the United States. In May alone, foreign investment totaled R$6 billion, indicating a global portfolio rotation amid uncertainties in the U.S. economy.

Infomoney: Ibovespa passa pela primeira vez de 139 mil e fecha no maior patamar da história
CNN Brasil: Capital estrangeiro, alívio global e juros impulsionam recorde do Ibovespa

2. Petrobras shows confidence with net profit of R$ 35 billion 

Petrobras announced a net profit of R$35 billion (US$6 billion) this week for the first quarter of 2025. Investments reached R$23.7 billion (US$4.1 billion), primarily directed toward pre-salt projects in the Búzios and Atapu fields, as well as the pre-salt areas of the Santos Basin and the coast of Rio de Janeiro.

In a press conference, the company’s CEO, Magda Chambriand, expressed confidence, stating that Petrobras is committed to delivering strong economic results for Brazilian society. According to Chambriand, profits would have been even higher if not for the exchange rate appreciation during the period. She emphasized that the financial results are a testament to Petrobras’ technical capabilities.

Agência Brasil: Petrobras está determinada a entregar resultados sólidos à sociedade

3. IPCA and services slow down

The Broad National Consumer Price Index (IPCA), Brazil’s official inflation, decelerated by 0.13 percentage points compared to March. In April, the two main product categories influencing the index were food and healthcare items. Over the past 12 months, inflation has accumulated a 5.53% increase, higher than in the same period last year.

Meanwhile, Brazil’s services sector also showed signs of slowing, with official data for March indicating a contraction. The first quarter closed with a 0.2% decline compared to the previous three-month period, breaking a streak of seven consecutive quarters of growth. A heated domestic labor market with rising formal employment and wages remains one of the key factors supporting service sector performance.

Both indices, the IPCA and services volume, were released this week by the Brazilian Institute of Geography and Statistics (IBGE).

Exame: IPCA de abril desacelera e fica em 0,43%; inflação acumulada de 12 meses sobe para 5,53%
Folha de S. Paulo: Serviços desaceleram e crescem 0,3% no Brasil em março, diz IBGE

4. Copom minutes highlight uncertain outlook

The minutes released by Brazil’s Monetary Policy Committee (Copom) indicate that successive hikes in the country’s benchmark interest rate are already affecting the credit market and helping to slow down the pace of economic expansion. The document also emphasizes that the international environment remains highly uncertain, particularly due to U.S. tariff policy, which calls for a cautious approach to monetary policymaking.

In its decision to raise the Selic rate from 14.25% to 14.75% per year, the committee noted that monetary policy remains highly restrictive and will continue to act as a brake on economic growth. So far, Copom observes an economic scenario with mixed signals regarding a slowdown. According to committee members, the effects of interest rate policy can be seen in the credit market, exchange rates, and corporate balance sheets.

Valor Econômico: Cenário prescreve juros em patamar contracionista por período prolongado, diz ata do Copom

5. During visit to China, Lula strengthens trade ties

President Luiz Inácio Lula da Silva traveled to China with a delegation aiming to reinforce diplomatic relations and expand commercial partnerships. In meetings with Chinese President Xi Jinping, Lula advocated for multilateralism as a way to ensure more diverse representation among nations in a global landscape marked by uncertainty and armed conflicts.

Lula also initiated talks to increase Chinese investments in Brazil’s agriculture and infrastructure sectors. A notable outcome was a US$1 billion agreement between Banco do Brasil and the China Development Bank (CDB) to boost financing for Brazilian and Chinese companies. Another concrete result was the formalization of R$27 billion in Chinese investments in Brazil, facilitated by the Brazilian Trade and Investment Promotion Agency (ApexBrasil). Among the planned initiatives are a renewable energy hub and a green ecosystem industrial park.

Exame: Lula inicia agendas na China com foco em estender comércio chinês no Brasil
Correio Braziliense: Governo anuncia R$ 27 bi em investimentos de empresas chinesas no Brasil