Brazilian assets lead LatAm surge after Bolsonaro's poll surprise
EWZ•Brazilian assets surged after Flavio Bolsonaro outperformed private poll predictions and led the first round of presidential voting. The Bovespa rose 8.78% to a record high, while the real gained 4.07%.
1. Brazil leads regional gains
Latin American markets climbed after right-wing senator Flavio Bolsonaro outperformed private poll predictions and took the lead in Brazil's first round of presidential elections. The Bovespa rose 8.78% to a record high, Petrobras gained 10% and Bradesco rose 14.8%.
2. Real and bonds advance
Brazil's real gained 4.07% to about 5 per dollar, while hard-currency bonds also advanced. Investors expected Bolsonaro to adopt more market-friendly policies and fiscal restraint; both candidates are set to face a runoff on October 25.
3. Regional measures rise
MSCI's regional equities index advanced 9.3%, and its currencies gauge rose 3.1%, putting it on track for its biggest daily jump in more than a decade. Colombia announced a 19.8 trillion-peso ($6 billion) local bond swap aimed at easing near-term repayment pressure, and the IMF approved a $1.9 billion program for Bolivia.
