Brazilian Markets Tumble After Lula's Election Victory
Markets reacted negatively to President Luiz Inácio Lula da Silva's victory for a fourth term, with the Brazilian real falling over 10% in Chicago futures trading and a Brazilian ETF in Japan dropping 11.59%. The dollar futures contract for November 2026 traded at R$ 5.5127, up 10.06% from the previous adjustment, while the NEXT FUNDS Ibovespa Linked ETF fell to 289.1 yen. The result contradicted market expectations, as Suno Research's chief economist noted they had favored Flávio Bolsonaro. Analysts predict a volatile week ahead as investors reassess positions, with Suno projecting economic growth of 1.3% in 2027 but persistent inflation limiting Selic rate cuts. The dollar may stay near R$ 5.40, though future market performance depends on government policy announcements.