Politics, the economy, and this week's show

CAUSE: In a week packed with economic indicators, the spotlight is also on political agendas, both in the U.S. and here in Brazil. Across the pond, President Trump is once again center stage, this time defending himself against a lawsuit regarding the tariffs he imposed. Back in Brazil, the focus is on the trial of former President Bolsonaro. All of this is happening during a week of major releases, such as Brazil's GDP—which has already been published and shows that our economy is starting to cool down. Meanwhile, in the U.S., the highly anticipated payroll report will shape expectations for the Fed's next decision, which is set to take place later this month.

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CONSEQUENCE: If we were at the theater, I would say this week's show is full of subplots where economic indicators serve as the backdrop, but political agendas steal the spotlight and could change the final act. For the financial market, every actor has the potential to alter the plot: the Bolsonaro trial in Brazil adds a layer of uncertainty that could trigger volatility in local assets, while the U.S. payroll report and Fed commentary on interest rates have the power to rewrite global liquidity expectations. As such, investors are watching this performance closely, tracking every line and gesture, adjusting their positions as the curtains (and exchange rates) rise and fall.

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