Turim Insights

The February edition of Visão Turim brought together Henrique Santos (Partner and Portfolio Manager), Lucas Panaro (Head of Liquid Funds), and Thiago Campos (Economist) to discuss the global macroeconomic outlook, political developments in Brazil, and their implications for asset allocation strategies.

Highlights:

• Global outlook: Higher-frequency data point to the possibility of a re-acceleration in global growth, also reflecting the fiscal and monetary stimulus implemented by major economies.
• United States: The nomination of Kevin Warsh was well received by markets, given the risk of a Fed Chair more susceptible to White House influence. Still, recent remarks suggest a preference for lower Interest Rates, mainly justified by the prospect of productivity gains associated with the expansion of artificial intelligence.
• Brazil: The Central Bank signaled that it expects to begin a new cycle of monetary easing in March, while still intending to maintain some degree of restrictiveness in order to ensure the convergence of Inflation to the target. The main challenge remains the labor market, which continues to run particularly tight, as evidenced by the unemployment rate at a historical low.
• Markets: A weaker U.S. Dollar and expectations of Interest Rates cuts in the U.S. continue to support flows into emerging markets. Brazilian assets, such as Equities and the Exchange Rate, have benefited from this backdrop, but have still underperformed relative to moves observed in comparable markets, particularly across Latin America.