Turim Insights

The October edition of Visão Turim brought together Fernando Verboonen (Partner and Co-CIO), Guilherme Ferraioli (Partner and Co-CIO), and Henrique Santos (Partner and Head Portfolio Manager) to discuss the repricing of global interest rates, the latest signals from the U.S. economy, developments following the first round of the Brazilian elections, and their impact on local markets.

Highlights:

• Global scenario: Global interest rates have undergone a new repricing amid elevated debt levels, inflationary pressures, and increased debt issuance. In the United States, oil prices between US$90 and US$100 and elevated diesel prices also remain in focus, while the midterm elections add uncertainty to the fiscal and political landscape.

• United States: The latest employment, inflation, and wage data have reduced the urgency of another rate hike by the Fed. Against this backdrop, discussion of a further adjustment has shifted to the December meeting. At the same time, artificial intelligence continues to account for a significant share of equity index performance, widening the gap between companies and sectors.

• Brazil: Economic activity continues to show gradual signs of slowing, with a slower pace of credit origination and job creation, as well as some loss of momentum in retail sales and industrial production. At the same time, growth projections for 2027 have been revised downward, in an environment still marked by elevated interest rates.

• Elections and local markets: The first-round result significantly shifted expectations for the presidential race and led to a reduction in risk premiums on Brazilian assets. Equities, interest rates, and the currency responded to growing expectations of a more substantial fiscal adjustment. This move was also accompanied by significant foreign capital inflows. With the runoff still ahead, the outlook remains subject to uncertainty.