Brazil Morning Call for Friday , February 20 , 2026

riotimesonline.com · Feb 20, 2026 · Collected from GDELT

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Today’s Focus The Big Picture: The Ibovespa staged a powerful 1.35% rebound on Thursday, reclaiming 188,534 — its second-highest close ever — while Wall Street went the other way. The divergence was striking: Petrobras surged on oil’s continued rally (Brent above $71), banks delivered a broad-based advance led by BB (+2.48%) and Bradesco (+2.01%), and the BRL strengthened to 5.227 despite the DXY pushing to a 3.5-week high at 97.85. Meanwhile, the S&P 500 fell 0.28%, the Nasdaq slipped 0.31%, and the Dow shed 268 points as Walmart’s cautious 2026 guidance and escalating Iran tensions triggered a risk-off shift. The 10-year Treasury yield climbed to 4.09%, its highest since the hawkish FOMC Minutes jolted markets on Wednesday. Today is the week’s main event: December PCE inflation (consensus: 2.8% headline, 2.9% core YoY) drops alongside the advance Q4 GDP estimate (consensus: 2.8%). This is the data the Fed cares about most. A hot core PCE print would validate the hawkish minutes and likely send the DXY above 98, pressuring EM currencies. A soft reading could revive rate-cut hopes and fuel a Friday relief rally. Separately, Trump said Thursday he would decide within 10 days on military strikes against Iran — Polymarket puts the probability of a February strike above 80%. Oil remains bid. The Ibovespa faces a classic “can it hold the gains?” session after yesterday’s outsized move, with RSI now touching 72 — firmly in overbought territory. Binary Events 08:30 ET U.S. Q4 GDP Advance + PCE Price Index + Personal Income/Spending — the week’s heavyweight data dump. 09:45 ET U.S. Feb Flash PMIs (Manufacturing + Services) — first real-time read on February activity. 10:00 ET Michigan Consumer Sentiment (Feb Final) — inflation expectations critical (cons: 3.5% 1Y, 3.4% 5Y). 10:00 ET New Home Sales (Dec) + Atlanta Fed GDPNow Q1 09:45 ET Fed’s Bostic speaks — first post-data reaction from FOMC voter. 07:00 ET Mexico Retail Sales (Dec) — consumer health gauge for LatAm’s second-largest economy. Geopolitical Iran-U.S. strike window — Trump: decision in 10 days. Polymarket: >80% Feb strike odds. Where We Left Off Thursday, February 19 close Indicator Level Thu Chg Weekly Chg YTD Ibovespa 188,534 +1.35% +1.11% +17.00% USD/BRL 5.227 −0.25% −0.16% −4.85% S&P 500 6,862 −0.28% +0.27% +0.2% Nasdaq Composite 22,683 −0.31% +0.46% −2.1% 10Y Treasury 4.09% +1 bp +3 bp −48 bp Gold (Comex Apr) $4,997 −0.24% −1.8% +6.5% Brent Crude $71.64 +1.83% +6.2% −4.4% Iron Ore (62% CFR) ~$100/t FLAT −0.4% −5.7% DXY 97.85 +0.19% +0.76% −7.8% What to Watch Today Friday, February 20 PCE is the main event. The December Personal Consumption Expenditures price index — the Fed’s preferred inflation gauge — drops at 8:30 ET alongside the advance Q4 GDP estimate. Consensus expects headline PCE at 2.8% YoY and core at 2.9% (up from 2.8%). GDP is expected at 2.8% QoQ annualized, a deceleration from 4.4% in Q3 but still solid. A hot core PCE above 3.0% would validate the hawkish FOMC Minutes and could push the 10Y yield above 4.15% and the DXY toward 98. A softer print would offer relief to EM assets and the BRL carry trade. Michigan final sentiment at 10:00 ET carries outsized weight this month — the preliminary 1-year inflation expectations jumped to 4.0% (from 3.3%), and the final revision matters for the Fed’s credibility narrative. For the Ibovespa specifically: After yesterday’s 1.35% surge, the index sits at RSI 72 — technically overbought. The all-time closing high of 189,699 (Feb 11) is within striking distance, just 0.6% away. But Friday sessions after a strong Thursday tend to consolidate. Watch for profit-taking in Petrobras if oil stabilizes around $71. Volume was strong at R$34.2B yesterday — if today’s turnover drops below R$20B, it signals conviction is fading. The Ibovespa Setup Technical snapshot for Friday’s session The Ibovespa’s Thursday session was a textbook recovery: opening near 186,020, dipping to 185,928 intraday, then powering up to close at 188,534 — a gain of 2,518 points. This is the second-highest close in history, behind only the 189,699 print from February 11. Petrobras ON led the charge (+2.62%) as Brent continued its geopolitical-driven rally, while banks delivered a coordinated advance: BB ON +2.48%, Bradesco PN +2.01%, Itaú PN gaining. The metals sector was the notable laggard, with Vale pressured by the lack of Dalian price discovery during the Lunar New Year shutdown. Bull case: The structural story remains intact. Foreign flows have exceeded R$33B YTD — extraordinary by any measure. The BRL’s resilience despite DXY strength signals genuine conviction in the Brazil trade. Petrobras has room to gap up further if EIA data confirms the API draw and Brent holds above $71. If PCE comes in soft, the Ibovespa could challenge the all-time high today. Bear case: RSI at 72 is flashing overbought. The index has been here before and consistently pulled back from the 189K–190K zone. A hot PCE could trigger a DXY spike that drags EM currencies and forces the BCB into a more cautious posture ahead of the March Copom. Thin Friday volumes could amplify moves in either direction. Key Levels Resistance: 189,699 (ATH close, Feb 11) → 190,561 (ATH intraday) → 191,702 (upper Bollinger Band). Support: 186,192 (20-day EMA) → 185,976 (Feb 14 close) → 183,100 (50-day SMA). RSI: 72.1 (14-day) — overbought zone; prior reversals triggered near 73–75. Road to March Copom 25 days to decision · March 17–18 The IBC-Br data released Thursday showed Brazil’s economic activity grew 2.5% in 2025, surpassing the Finance Ministry’s 2.2% estimate. This robust activity backdrop complicates the BCB’s easing path: the economy isn’t slowing enough to justify aggressive cuts, but the Selic at 15% is historically restrictive. The hawkish FOMC Minutes this week — with several officials openly discussing rate hikes — further narrows BCB Governor Galípolo’s room to maneuver. Today’s PCE is a direct input to the Copom calculus. If U.S. inflation remains sticky above target, the Fed‘s “higher for longer” stance hardens, pressuring the BRL and forcing the BCB to weigh external stability against domestic activity. The oil surge adds another variable: Brent above $70 feeds through to fuel costs and inflation expectations in Brazil within 30–60 days. The consensus path remains a cautious 25bp cut on March 17 with dovish forward guidance, but the probability distribution is shifting toward a hold if external conditions deteriorate further. Verdict The March cut remains base case, but its size is the swing variable. A 25bp cut with cautious guidance is now the modal expectation. Today’s PCE could shift the needle: a soft print (≤2.7% core) would restore confidence in a 50bp start, while a hot print (≥3.0% core) could push the committee toward holding. The BRL at 5.227 provides some cushion, but the DXY at 97.85 is a headwind. Watch the dólar futuro closely today — if it pushes above 5.30, the March cut probability drops sharply. Economic Calendar Friday, February 20, 2026 Time (ET) Event Impact All Day Holiday: China (Lunar New Year continues) — no Dalian iron ore trading HOLIDAY Pre-Mkt Global PMIs: Japan Mfg 52.8 (beat 51.3), Services 53.8 | India Mfg 57.5 | UK Retail Sales +1.8% MoM (blowout) | German PPI −0.6% MoM (deflation deepens) MEDIUM 07:00 Mexico — Retail Sales (Dec) Prev +4.4% YoY. Consumer health gauge ahead of Banxico’s next decision. MEDIUM 08:30 U.S. Mega Data Dump: ▸ Q4 GDP Advance: Cons 2.8% | Prev 4.4% ▸ Core PCE (YoY Dec): Cons 2.9% | Prev 2.8% — the Fed’s preferred inflation gauge ▸ PCE headline (YoY): Cons 2.8% | Prev 2.8% ▸ Personal Income (MoM): Cons +0.3% | Prev +0.3% ▸ Personal Spending (MoM): Cons +0.4% | Prev +0.5% ▸ GDP Price Index: Cons 2.8% | Prev 3.7% HIGH 09:45 U.S. Feb Flash PMIs (S&P Global) Mfg Cons 52.4 | Prev 52.4 · Services Cons 53.0 | Prev 52.7 · Fed’s Bostic speaks (same slot) HIGH 10:00 Michigan Consumer Sentiment (Feb Final) Cons 57.3 | Prev 56.4 · 1-Year Inflation Exp: Cons 3.5% (from 4.0%) · 5-Year: 3.4% | Prev 3.3% HIGH 10:00 New Home Sales (Dec) + Atlanta Fed GDPNow (Q1) New Homes Cons 732K | Prev 737K. GDPNow: Cons 3.0% MEDIUM 13:15 Fed’s Logan Speaks MEDIUM 13:00 Baker Hughes Oil Rig Count Prev 409 rigs. Supply-side signal amid Iran-driven price rally. LOW 15:30 CFTC Commitments of Traders Positioning data for BRL, gold, crude, S&P. BRL speculative net longs at +31.6K — watch for changes. LOW Calendar Takeaway This is the week’s heavyweight session. The 8:30 ET data dump delivers both Q4 GDP and December PCE simultaneously — a rare double-barreled release that will set the tone for the entire trading day. If GDP comes in above 3.0% and core PCE hits 3.0%, the “no cuts in 2026” narrative gains traction and the dollar rallies hard. The February flash PMIs at 9:45 ET provide the first real-time activity data for this month, with manufacturing the key watch. Michigan sentiment at 10:00 ET matters for the inflation expectations revision — a downward revision from the alarming 4.0% preliminary to the 3.5% consensus would ease some pressure. Mexico retail sales add LatAm context. The afternoon belongs to Fed speakers (Bostic, Logan) who will parse the morning’s data in real time. LatAm Markets Snapshot Thursday, February 19 close Index Level Thu Chg RSI (14d) Signal Ibovespa (Brazil) 188,534 +1.35% 72 Overbought IPC (Mexico) 70,846 −0.06% 63 Neutral-Bullish COLCAP (Colombia) 2,386 +0.84% 55 Neutral IPSA (Chile) 10,809 −0.51% 39 Bearish MERVAL (Argentina) 2,839,106 +4.26% 46 Neutral The MERVAL’s 4.26% surge stands out — Argentina’s index rallied on Milei reform optimism and ahead of the January trade balance release (expected $900M surplus, 26th consecutive positive month). Chile’s IPSA was the laggard, slipping below its 200-day EMA with RSI at 39 signaling further downside risk. Colombia’s COLCAP continues its steady grind higher, benefiting from the oil rally given Ecopetrol’s index weight. Mexico’s IPC was essentially flat as mar