The end of the world seemed scheduled — at least rhetorically — for the night of April 7, 2026. Donald Trump’s promised strike on Iran did not materialise. Instead, a two-week pause was announced — enough to avert the worst and, ironically, prolong uncertainty. In markets, few things are more uncomfortable than a disaster deferred.
With that caveat, the assessment by Bruno Boetger, Bradesco’s vice-president, delivered earlier that day at a Bradesco BBI investor event, still stands. Brazil continues to benefit from a broader trend: the global reallocation of capital. Foreign inflows into B3 have reached roughly R$54bn so far this year — around 200 per cent of the total recorded in 2025. The Ibovespa, which has climbed to about 190,000 points — a level that until recently seemed unlikely — is up close to 20 per cent year to date. The explanation is less sophisticated than it sounds: flows, driven by diversification away from the US.
The war — even if temporarily paused — remains the dominant variable, Boetger argues. Its effects are transmitted through commodities: higher oil prices push inflation upwards, which in turn keeps interest rates elevated for longer. The 25 basis-point cut signalled by the Copom was seen as the start of an easing cycle, but with an important caveat. Should geopolitical tensions escalate, the cost of capital will remain higher for longer. Trump’s pause does not resolve the issue; it merely postpones it. Notably, domestic risks such as elections have slipped into the background — overshadowed by global dynamics.
In capital markets, the window remains open — but narrow. Bradesco estimates around 10 deals in 2026, totalling roughly R$15bn, broadly in line with 2025. The composition matters: follow-ons dominate, while large IPOs remain absent. The bank does not disclose names in the pipeline, though the market speculates about potential transactions in sanitation. Demand, when it materialises, is largely foreign — with international investors accounting for 50 to 60 per cent of recent books. This is not indiscriminate appetite, but global selectivity.
The contrast with domestic investors is stark. With the Selic rate near 15 per cent, local capital continues to migrate towards fixed income and cash. Funds have recorded net outflows of roughly R$6bn this year, reversing inflows of around R$40bn in the previous period, Boetger estimates. In credit, the adjustment is already under way: spreads have widened by 30 to 70 basis points across segments, and issuance volume is expected to fall to around R$550bn in 2026, below last year’s record R$740bn. In Boetger’s words, the market has “paused to reprice risk”.
Selectivity is also evident in sector allocation. Growth, where it exists, is concentrated in infrastructure — such as ports and highways — as well as energy and sanitation. These sectors are less exposed to consumption cycles and more anchored in long-term concessions and contracts. Equity still works, but demands quality, visibility and alignment with international investors.
The less visible — and potentially more relevant — signal lies outside equities. Credit tends to turn first. Brazil today trades less on its own merits and more on its relative position in an unstable world. It works — as long as everything else looks worse. The problem is that this advantage does not depend on Brazil — and can disappear as quickly as it arrived. Sometimes, all it takes is a two-week war.