Joint
Optimism is returning to markets, with global stocks set for their best weekly gain since November and benchmark Brent crude near $60 a barrel. Risk assets are almost uniformly higher at the close of the week as the US Senate voted to adopt a budget plan to support President Biden's $1,9 trillion stimulus package and investors await the January monthly report on the US labor market. Global stocks and S&P 500 futures are advancing, while benchmark Treasury yields are rising. After fears about retail-led volatility ravaged markets last week, investor sentiment has returned to bullish sentiment as the GameStop Corp bubble deflates. Global stocks are once again flirting with all-time highs as investors regain confidence following rising corporate profits, easing monetary policy, and renewed government fiscal stimulus.
Fixed rent
In emerging markets, yield curves are showing mixed movements as developed markets experience rising yields. Investors will be watching Congress and the Brazilian government for signals about how quickly the economic agenda will progress; if talks advance, swap rates are likely to fall due to optimism that the central bank will wait before raising rates, thus avoiding the risk of rate hikes in the region sooner than anticipated. Brazil, Mexico, Chile, and Colombia will have new inflation data next week; only the figures from Mexico and Brazil are likely to provoke a significant market reaction. Brazilian inflation, due on February 9, is forecast to reach 4,65% y/y in January, up from 4,52% previously; BCB President Campos Neto said last week that officials would analyze the data to consider the need for a near-term rate hike. Mexico's inflation rate is forecast to rise to 3,45% y/y in January vs. 3,15% previously; the curve is priced in 19bps of cuts over the next three months, as Banxico Deputy Governor Jonathan Heath said the bank is likely to wait until after April to consider further rate cuts. In Colombia, rates show the July 2024 TES down 3,6bps to 3,13%, the April 2028 TES down 3bps to 4,82%, the 3-month IBR Swaps down 0,5bps to 1,66%, and the 5-year Colombia CDS down 3,5bps to 100,71bp. Colombia's inflation figure is projected to be around 0.38%, according to ACVAeconomia, contrasting with the analyst average of close to 0.44%.
Money Exchange
The peso depreciated for the second consecutive day, falling 0,6%, closing Thursday at $3.557,19 per dollar. Nevertheless, the currency is on track for weekly appreciation. The optimism in the global stock market at the end of the week is reassuring the FX market as Congressional approval of President Biden's stimulus package in the US advances. Oil remains at record highs, although valuations of the region's currencies appear tentative ahead of the employment data at 8:30 a.m.
Variable income
U.S. stock futures are trading in positive territory in premarket trading, poised to close out what is believed to be their best week since November after a four-day winning streak and as investors await the first labor market report of 2021, where the consensus estimate is for job growth of approximately 50000 in January, following a decline in December. Dow Jones Industrial Average futures were pointing to an opening gain of more than 100 points, while S&P 500 futures and Nasdaq 100 futures were also trading higher in premarket trading, up 0.12% and 0.39%, respectively. Wall Street is in the midst of a solid earnings season. Of the 184 S&P 500 companies that have reported earnings to date, 84.2% have exceeded analyst expectations, so the progress of the earnings season, combined with relevant economic indicators, will be key in determining investor sentiment.
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