Ibovespa posts worst month since June 2022; dollar gains 5.22% in October

Brazil's main stock index, the Ibovespa, fell 9.88% in October to 167,921.80 points, its worst monthly performance since June 2022, while the commercial dollar rose 5.22% to R$5.444. The market turmoil followed Lula's election victory on October 26, which reversed expectations built around a Flávio win. The index triggered a circuit breaker on the first trading day after the vote, and analysts noted investors had to rapidly reorganize portfolios. Concerns now center on fiscal policy uncertainty and the composition of the new economic team. The weaker currency raised inflation worries, leading Itaú to project the central bank will hold rates at 13.75% in November, with attention focused on upcoming fiscal announcements.