The Ibovespa fell 0.1% to close at 141,283 on Monday, easing from record highs as markets assessed the rate outlook for the BCB. Expectations for Tuesday’s Q2 GDP data point to a sharp slowdown in growth to 0.3% from 1.4% in Q1, reinforcing concerns that the economy is losing steam under the weight of a prolonged 15% Selic rate, which policymakers have pledged to keep elevated to re-anchor inflation expectations near the 3% target. That drag was compounded by the August PMI showing Brazil’s industrial sector suffered its steepest contraction in two years, squeezed by weak demand and the impact of new US tariffs, highlighting the vulnerability of manufacturers and exporters. Political risk is also re-emerging as the Supreme Court begins the high-profile trial of former President Jair Bolsonaro, raising uncertainty over Brazil’s institutional stability and relations with Washington. Losses were led by Petrobras (-0.6%), Banco do Brasil (-1.4%), and Companhia Sanea (-0.7%).