Brazil's real jumps after Bolsonaro leads election first round
EWZ•Brazil's real rose more than 4% against the dollar after Flavio Bolsonaro won 47% of votes in the first round, ahead of President Luiz Inacio Lula da Silva's roughly 45%. The Frankfurt-listed MSCI Brazil ETF gained more than 16% in early trading.
1. Real strengthens
The real rose past 5.00 per dollar from around 5.22 after Flavio Bolsonaro outperformed poll predictions and led Sunday's first round of Brazil's presidential election. Bolsonaro will face Lula in a runoff this month.
2. Markets rally
Ibovespa futures climbed more than 8%, while Brazil's international debt also rallied. The 2056 bond rose 1.4 cents on the dollar to a bid of 93.5 cents. Analysts expected further gains; Societe Generale forecast the real at 5.10 by end-2026, while Morgan Stanley forecast it could fall below 4.90 and toward 4.50 in the first quarter of next year.
3. Candidates' platforms
Bolsonaro has presented himself to investors as a more centered version of his father, with a pro-market agenda that includes tighter public spending, privatizations and lower taxes. Lula's allies warned before the vote of possible outside interference, while Washington rejected claims of US interference reported last week.
