Foreign capital inflows for investment in securities already listed on the B3 stock exchange reached R$ 26.31 billion in January, exceeding the R$ 25.47 billion achieved in 2025. Extending the annual calendar to February 3rd, more than R$ 28 billion has been invested in the exchange. Einar Rivero , CEO of the consulting firm Elos Ayta, observes that the behavior of the stock market is a clear sign of a reorganization of capital flows in the country.
Historically, says Rivero, January tends to be a more favorable month for defensive assets or those linked to the exchange rate. This year, however, the scenario was different: domestic risk was rewarded. "And the central point of this movement deserves highlighting: the appreciation of Brazilian assets occurred in parallel with a weakening of currency hedges, suggesting a reduction in risk premiums and a repositioning of investors, especially foreign ones, towards the local market," he states.
The prospect of falling interest rates, coupled with declining domestic inflation and the outflow of US assets by global investors migrating primarily to emerging markets, is fueling strong stock market gains and the positive performance of the US dollar. The Ibovespa, which jumped almost 34% in 2025 and another 12.5% in January, is advancing in February, but subject to corrections.
The exchange rate weakened somewhat discreetly, after being heavily influenced for months by the US dollar's exchange rate abroad. During the past year, the currency consistently dipped to 99 points or less, according to the Dollar Index (DXY) – an indicator that compares the dollar to a basket of currencies from the US's main trading partners and which, below 100 points, benefited other currencies.
Among these factors, the Brazilian real appreciated more than 11% against the dollar last year – a trend maintained in January of this year, when it rose another 4.4% – a “contained” trajectory sustained in this early February. In the stock market, however, there is no “contained” trajectory in terms of appreciation and financial turnover, which is advancing driven by exceptional buying power in stocks by foreign investors.
And who is the new chairman of the Fed?
The behavior of the Brazilian stock market, as well as emerging Latin American markets – which are appreciating – confirms the demand for diversification among investors, for whom the next moves in US monetary policy are unclear. The reception to Kevin Warsh as the Fed's head was positive. The international market sees Donald Trump's preferred candidate as a "conservative" who will be attentive to inflation.
But how far will Warsh be able to shield the Fed from White House interference? Powell managed it with great difficulty, with Trump suggesting – day in and day out – that the story would be different after his departure. We shall see.
Even if Warsh doesn't disappoint and doesn't drag interest rates down to 1% as Trump hopes, the outlook is for increased asset volatility in the coming months. In November, the US and Trump will face a test with the midterm elections. A similar scenario is unfolding for Brazil, where the electoral race promises to be fierce between President Lula, focused on re-election, and his opponent, whoever that may be.
Here, it's also necessary to consider that, already in the second quarter, the Brazilian Executive branch will be reconfigured due to the exodus of ministers who are expected to leave their posts to run in the general elections in October. Congress is also involved. But, for now, it's dealing with the " Master Case ," which could lead to a Parliamentary Commission of Inquiry (CPI), and the Joint Parliamentary Commission of Inquiry (CPMI) on the National Institute of Social Security (INSS).
In the week leading up to Carnival, a working group composed of senators, focused on investigating the Master project, is expected to "strengthen" ties with the Central Bank, the Federal Police, and the Supreme Federal Court in search of more information.
Pre-Carnival festivities boost demand for hedges.
The financial market will embark on Monday, February 9th, in the week leading up to Carnival and will follow its agenda until "Fat Friday," February 13th, the opening day of the country's biggest popular festival.
The countdown to such a long holiday justifies anticipating operations and accelerating the demand for hedging to cover market risks, especially interest rates and exchange rates , due to the mismatch between local and international trading sessions – conditions that can impose greater volatility on assets.
During this period, geopolitical risks can be minimized because the global market will suffer a considerable, but expected, setback during Carnival week. China will be out of the market. Coincidentally, the world's second-largest economy celebrates the New Year on Tuesday, February 17th, which is Carnival in Brazil. In mainland China, the holiday runs from February 15th to 23rd. In Hong Kong, it's from February 17th to 19th.
In the US, however, labor market and consumer inflation data for January – delayed by the brief shutdown – will be released on Wednesday the 11th and Friday the 13th, respectively. These figures could have repercussions, even though the next monetary policy meeting of the Federal Reserve ( Fed ), the US central bank, is still a ways off.
In Brazil, B3 will be closed on Monday and Tuesday, the 16th and 17th, and will reopen on Wednesday, the 18th, at 1 PM. Business is expected to pick up on Thursday, albeit slowly. Until then, there is still a long way to go and little economic data available. IBGE will continue publishing activity indicators for the end of 2025. Industrial production figures for December 2025 have already been released and, showing a decline, reinforced expectations of a weak economy in the fourth quarter. On Thursday, the 12th, the institute will release the performance figures for services and on Friday, the 13th, for retail sales.
Before that, however, on Tuesday, February 10th, the January IPCA (Brazilian consumer price index) will be released. In 2025, inflation reached 4.26%, below the target ceiling, but still putting pressure on expectations that remain detached from 3% and explain, at least in part, the Central Bank's caution in the interest rate cutting process, although the institution has signaled the start of the new cycle for March. Large banks and consultancies ended the week renewing bets on an initial reduction of the Selic rate (Brazil's benchmark interest rate) by 0.50 percentage points. Anything above that is unlikely.
The prospect of falling interest rates, coupled with declining domestic inflation and the outflow of US assets by global investors migrating primarily to emerging markets, is fueling strong stock market gains and the positive performance of the US dollar. The Ibovespa, which jumped almost 34% in 2025 and another 12.5% in January, is advancing in February, but subject to corrections.
The exchange rate weakened somewhat discreetly, after being heavily influenced for months by the US dollar's exchange rate abroad. During the past year, the currency consistently dipped to 99 points or less, according to the Dollar Index (DXY) – an indicator that compares the dollar to a basket of currencies from the US's main trading partners and which, below 100 points, benefited other currencies.
Among these factors, the Brazilian real appreciated more than 11% against the dollar last year – a trend maintained in January of this year, when it rose another 4.4% – a “contained” trajectory sustained in this early February. In the stock market, however, there is no “contained” trajectory in terms of appreciation and financial turnover, which is advancing driven by exceptional buying power in stocks by foreign investors.
