Brazilian assets soared, and investors were quick to bet on a possible change of government. Previously, Senator Flavio Bosonaro surpassed poll expectations in the first round of voting in the presidential election. He was ahead of incumbent President Luis Inácio Lula da Silva, and is expected to win the second round of voting to be held on October 25. The Brazilian real surged 3% after opening in São Paulo, outperforming all other currencies. The US-listed iShares MSCI Brazil ETF rose 15% in pre-market trading in New York. Bosonaro, who is seen as more popular in the market than left-wing Lula, received 47% of the vote, and current President Lula won 45% of the vote. Investors generally expected Lula to take the lead in the first round, and believed that a tie between the two sides was already the ideal outcome for Bosonaro. J.P. Morgan Chase said in a report that now, the election campaign looks like Bosonaro is “in the lead, just waiting to hold on.” Antonina Tarassiouk, head of international economic analysis at Reams Asset Management, which manages $34 billion in assets, said: “This is a welcome surprise result. The previous results were clearly asymmetrical: either Lula maintained the status quo, or Bosonaro, which was more popular in the market and emphasized fiscal consolidation, won. Now, this gives investors a signal to further expand their long positions.”

Brazilian assets soared, and investors were quick to bet on a possible change of government. Previously, Senator Flavio Bosonaro surpassed poll expectations in the first round of voting in the presidential election. He was ahead of incumbent President Luis Inácio Lula da Silva, and is expected to win the second round of voting to be held on October 25. The Brazilian real surged 3% after opening in São Paulo, outperforming all other currencies. The US-listed iShares MSCI Brazil ETF rose 15% in pre-market trading in New York. Bosonaro, who is seen as more popular in the market than left-wing Lula, received 47% of the vote, and current President Lula won 45% of the vote. Investors generally expected Lula to take the lead in the first round, and believed that a tie between the two sides was already the ideal outcome for Bosonaro. J.P. Morgan Chase said in a report that now, the election campaign looks like Bosonaro is “in the lead, just waiting to hold on.” Antonina Tarassiouk, head of international economic analysis at Reams Asset Management, which manages $34 billion in assets, said: “This is a welcome surprise result. The previous results were clearly asymmetrical: either Lula maintained the status quo, or Bosonaro, which was more popular in the market and emphasized fiscal consolidation, won. Now, this gives investors a signal to further expand their long positions.”