According to Barclays Bank, Lula's victory may prompt the market to flatten net collection positions and lengthen positions in Brazilian real. Barclays Bank strategists Roberto Sesemsky and Andrea Kiegel wrote in a report that it is expected that interest rate contracts expiring on January 31 may sell off about 300 basis points in the next few days as investors close their net collection positions; at the same time, the exchange rate of the US dollar against the Brazilian real may initially rise to the 5.50 range. Given Lula's promises during the election campaign that hinted at a more relaxed fiscal stance, the market will pay close attention to his appointment as finance minister and the signals his policy agenda sends.

According to Barclays Bank, Lula's victory may prompt the market to flatten net collection positions and prolong positions in Brazilian real. Barclays Bank strategists Roberto Sesemsky and Andrea Kiegel wrote in a report that it is expected that interest rate contracts expiring on January 31 may sell off about 300 basis points in the next few days as investors close their net collection positions; at the same time, the exchange rate of the US dollar against the Brazilian real may initially rise to the 5.50 range. Given Lula's promises during the election campaign that hinted at a more relaxed fiscal stance, the market will pay close attention to his appointment as finance minister and the signals his policy agenda sends.