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    Brazil’s S&P Global Manufacturing PMI fell to 47 in January, down from 47.6

    by VT Markets
    /
    Feb 2, 2026
    The S&P Global Manufacturing PMI for Brazil fell from 47.6 to 47 in January, indicating a deeper contraction in the manufacturing sector. This decline points to ongoing economic difficulties for businesses, as the pressures on the economy continue to affect manufacturing.

    Economic Challenges

    January’s manufacturing data shows a continued slowdown, indicating that economic challenges are increasing. We believe this means the Brazilian Real (BRL) could weaken further against the US dollar in the next few weeks. The USD/BRL exchange rate rose by 4% in the last quarter of 2025, and this new data adds support to that trend. This report also suggests a negative outlook for Brazilian stocks, especially for industrial and materials companies on the Bovespa index. It might be wise to buy put options on the EWZ ETF or short Bovespa futures to prepare for a possible downturn. In a similar manufacturing slump in 2023, the index dropped over 7% in the following two months. With the economy weakening, we think the central bank may need to consider lowering the Selic interest rate later this year. Brazil’s IPCA inflation ended 2025 at 3.8%, giving the bank some flexibility if this economic weakness continues. Traders may want to buy Brazilian interest rate futures to bet on a more relaxed monetary policy.

    Market Volatility Opportunity

    Overall, this PMI figure adds to economic uncertainty, which usually leads to increased market volatility. We can expect implied volatility on Bovespa options to rise. This could create opportunities for strategies like long straddles on major Brazilian stocks or the index itself. Create your live VT Markets account and start trading now.

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