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Analysts Forecast Brazil Market Plunge After Lula Turnaround Win
- Following the re-election of President Luiz Inacio Lula da Silva, Brazilian stocks and the real currency slumped, with the Bovespa index falling 10 per cent and triggering the market's circuit breaker mechanism.
- This selloff reverses the rally seen earlier this month when markets soared on expectations of a win for President Jair Bolsonaro, whom prediction markets like Kalshi had priced at more than 75 per cent chance on Friday.
- Brazil's sovereign debt also plummeted, with the 2056 maturity down around 2.5 cents, while prices of raw sugar slid nearly 5 per cent and five-year credit default swaps jumped to 151.67 basis points.
- Investors are seeking a credible commitment to fiscal discipline, said Alejo Czerwonko, chief investment officer for emerging markets at UBS Global Wealth Management, noting the prior rally is expected to be largely priced out.
- Attention now turns to Lula's choice of finance minister in coming weeks to signal the administration's fiscal approach, as the team aims for a budget surplus of about 1.3 per cent of gross domestic product by 2030.
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102 Articles
102 Articles
The sharp drop in the Ibovespa index caused even a 30-minute suspension of transactions
The sharp drop in the index led to a suspension of trade for 30 minutes before opening. ...
·Brussels, Belgium
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While the EU welcomes the re-election of Brazil's President Lula, it has caused a fall in the price of Brazilian stocks and bonds, with markets worried about Brazil's high level of debt.
·Hamburg, Germany
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The Brazilian stock market plunged sharply into the red on Monday following the election victory of leftist President Lula da Silva. The main stock market index dropped…
·Amsterdam, Netherlands (Kingdom of the)
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Investors had relied on Bolsonaro's tighter fiscal policy - and are now waiting for the appointment of the Minister of Finance.
·Vienna, Austria
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Total News Sources102
Leaning Left6Leaning Right15Center11Last UpdatedBias Distribution47% Right
Bias Distribution
- 47% of the sources lean Right
47% Right
L 19%
C 34%
R 47%
Factuality
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