Oil surges past $100 as China cuts exports, real weakens sharply

Oil pushed back above $100 per barrel on Thursday — a nearly 3% jump in a single session — after China suspended exports of refined products, deepening a supply shortage that was already worrying before the decision. The move reached Brazil immediately and in compounded fashion: the dollar closed 0.98% higher at R$5.223, driven by the combination of Middle East geopolitical risk, U.S. Treasury yields at levels not seen in decades, and an increasingly fraught domestic backdrop on the eve of the first round of the presidential election. The Brazilian stock market advanced on the session, but the day's most meaningful signal did not come from the Ibovespa — it came from the private credit market and from an acceleration of redemptions in tax-exempt funds, which posted the largest volume of net withdrawals since 2021, according to data from the Credit Guide platform. The adverse macroeconomic backdrop — with high interest rates, household and corporate debt at historic highs, and activity decelerating — is eroding retail investor portfolios at a pace that is surprising even the most conservative managers.

September's manufacturing PMI confirmed what those flows had already signaled: Brazilian industrial activity retreated to its weakest level in nearly three and a half years, with a sharp deterioration in demand. Bradesco projects that August's industrial production, due Friday, should show a gain of just 0.2% at the margin, driven exclusively by extractive industry — manufacturing should remain stagnant. For a country that needs to grow to sustain its fiscal trajectory, these numbers put the structural difficulty of the moment in perspective: with the Selic at 15% per year, the cost of working capital for companies averages 24.2% per year, while the indebtedness of the country's thousand largest companies has reached 72.2% of equity, a level higher than the peak of the 2015 recession, according to the Valor 1000 yearbook.

It is in this context that President Lula announced, in an interview with the Flow Podcast, that the government is discussing with the Central Bank a ban on issuing more than one credit card per person. The measure, which the president himself framed as a "moralization of credit," signals a regulatory approach to the indebtedness problem that contradicts the credit-expansion logic that has underpinned part of consumption growth in recent years. For financial markets, the proposal raises immediate questions about its impact on the earnings of major retail banks — whose credit card revenues account for significant shares of their profits — and about the operational feasibility of such a restriction in a system where credit extension is guided by risk models, not product counts. On the same election panel, Lula said he could apply commercial reciprocity to the United States in response to Donald Trump's tariffs, signaling that, if re-elected, the tone of bilateral trade relations could harden — even as Brazil and the U.S. have just created a working group to discuss a trade deal, announced on the sidelines of the G20 in Milwaukee.

The Banco Master scandal, meanwhile, acquired an institutional dimension today that goes far beyond the case itself. The Federal Police scheduled depositions next week from the current Central Bank president, Gabriel Galípolo, his predecessor Roberto Campos Neto, and BTG Pactual founder André Esteves, as witnesses in the investigation into the supervision of Master. Messages extracted from the phone of Daniel Vorcaro, the bank's owner, show that Campos Neto invited him to a meeting at his residence in the interior of São Paulo while still presiding over the BC. The institution's former head of Banking Supervision, Belline Santana, told the Federal Police he had met with Vorcaro at least five times, between São Paulo and Brasília. That the two former Central Bank presidents and the leading figure of the country's largest investment bank are being summoned simultaneously to testify in a regulatory corruption investigation is an event without recent precedent in the Brazilian financial system, and the timing — a week before the first round — considerably amplifies the political noise.

In the structured credit market, the Faria Lima was caught off guard by a CMN resolution that prohibits FIDCs from acquiring credit rights over judicial proceedings that have not been finally adjudicated — so-called pre-precatórios — effective October 13. Industry associations, including ABVCAP and ANFIDC, are racing to request a postponement of the measure from the Ministry of Finance, the Central Bank, and the CVM, arguing that the deadline is unworkable and the impacts have not been assessed. The rule came in the wake of the frauds involving Master itself and FIDC structures, and the debate over its calibration ties directly into the broader discussion about tax-exempt securities — whose outstanding stock has more than doubled since 2022 and today totals R$2.3 trillion, with foregone tax revenue estimated at R$50 billion per year, according to an analysis by asset manager Leto Capital. Infrastructure debenture spreads reached their highest level since 2024, and issuance in the segment plunged to its lowest level since January 2019 — a sign that the domestic capital market, particularly long-term private credit, is undergoing a structural contraction that goes beyond the interest rate cycle.

On the international stage, Lynas Rare Earths, listed on Australia's ASX, announced the acquisition of Meteoric Resources for approximately R$3.5 billion to absorb the Caldeira Project in southern Minas Gerais — one of the largest rare earths ventures in the Southern Hemisphere. The transaction inserts Brazil more directly into the global contest over critical minerals, at a moment when China maintains restrictions on exports of strategic elements and the United States seeks to diversify its supply chains away from the Asian axis. Also on the industrial front, ArcelorMittal confirmed it intends to invest more than R$10 billion in additional capital in Brazil after the government imposed limits on Chinese steel imports — a victory for the protectionist lobby that, while easing the position of large domestic producers, raises costs for downstream manufacturing.

On the immediate agenda, investors are watching Friday's U.S. payrolls release with particular attention: any surprise in U.S. employment data, in a context where Treasuries are already pricing in higher rates for longer, could amplify pressure on the real and raise the cost of external financing for Brazilian corporates and the government. On the domestic front, Sunday's first round of the presidential election will define not only the country's political trajectory but the starting point for the discussions on fiscal policy, interest rates, and credit that will dominate the fourth quarter — and that markets are already rehearsing to price in, with the dollar firm above R$5.20 and NTN-Bs in high demand as inflation protection.

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