Itaú BBA - Vehicle sales slightly rise in Brazil

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Vehicle sales slightly rise in Brazil

May 3, 2019

March's industrial production will also be released today.

Talk of the Day


According to Fenabrave, vehicle sales reached 232k in April, increasing 1.1% mom/sa (our seasonal adjustment). In year-over-year terms, sales increased 6.7%. The breakdown shows a 0.9% increase in passenger cars & light vehicles components and a 4.4% gain in trucks & buses. Our forecast for auto production (Anfavea), to be released next Tuesday, is 254k (0.6% mom/sa). For April’s industrial production, our preliminary forecast points to a 0.9% mom/sa decline, after an 0.7% expected drop in March (to be released today).

The trade surplus in April reached $6.1 billion, below our expectations and the market consensus (both at $6.9 billion). Despite the disappointment, the result shows recovery in relation to the one observed in March ($5.0 billion). The seasonally-adjusted annualized quarterly moving average slid slightly to $56 billion in April, from $57 billion in the previous month, while the surplus in 12 months remained stable at $57 billion. With widespread weakness in exports and imports at the beginning of the year, trade balance remains robust in 2019.
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Day Ahead: On economic activity, March’s industrial production will be released at 9:00 AM. We forecast a 0.7% decline on a seasonally adjusted monthly basis, after a 0.7% gain in February, leading to a 5.1% drop in year-over-year terms. 


Business confidence moderates in April. ICARE’s business confidence index decreased to 52.1 from 54.4 points (50 = neutral) one year prior. In the first four months of the year, business confidence has been below levels seen in the same period of last year. Industrial confidence was the main drag, printing 8.3pp below the level recorded in April last year (44.4 points vs. 52.7), and remains the only one of the four sub-indexes below natural. Retail confidence also dropped 5.2pp (55.9 points vs. 61.1 points one year ago), recording the sixth consecutive month of deterioration. Construction confidence added a second month in optimism, at 52.2 points, improving relative to the 48.4 reading in April last year. Meanwhile, mining confidence is still elevated at 62 points (from 54.9 one year earlier) and far above levels at the close of 2018. Business confidence excluding mining is back below neutral levels, coming in at 49.8 points (54.3 one year ago). Overall, still positive business confidence, low interest rates, current copper prices levels, and positive signs for investment are consistent with near neutral growth this year (from 4% in 2019).

Day Ahead: At 10:00 AM, INE will publish retail sales for March. Low consumer sentiment and falling new car sales point to still weak retail sales growth of 1.0% in the month.


Day Ahead: The central bank will release its monthly expectations survey. We expect a new deterioration of inflation expectations due to a weakening peso.

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