Global Markets
Brazil votes in Sunday's runoff with Datafolha showing a 50-50 tie, while betting markets heavily favour Flávio Bolsonaro
The last Datafolha poll puts Lula and Flávio Bolsonaro level on valid votes, but prediction markets give Bolsonaro better than an 80% chance, a gap that leaves Brazilian assets open to a sharp move on Monday.
HedgeWeekly News Desk ·
Brazilians choose a president on Sunday, October 25, and the final Datafolha survey before the runoff shows the race between President Luiz Inácio Lula da Silva and Flávio Bolsonaro exactly level. The in-person poll of 2,154 voters, taken from October 20 to 22, gave each man 50% of valid votes, with a two-point margin of error. Bolsonaro's lead in Datafolha's series has narrowed each week, from 52%-48% on October 8 to 51%-49% on October 15.
Flávio Bolsonaro, 42, the son of former president Jair Bolsonaro, came first in the October 4 first round with about 56.1 million votes against 53.9 million for Lula, 80, who is seeking a fourth, non-consecutive term. Betting markets read the contest very differently from pollsters: at 11:00 a.m. New York time on Saturday, Polymarket priced Bolsonaro's chance of winning at 82.3% and Kalshi at 84%.
Brazilian stocks went into the weekend little changed. The Ibovespa closed Friday at 205,083, up 0.47% on the day and down 0.17% on the week, leaving it about 27% higher for the year. The iShares MSCI Brazil ETF rose 1.77% to $42.59 in New York. Much of the election trade was put on after the first round: Neuberger Berman says the real gained about 4%, long-dated dollar bonds rose about 1.5% and local rates fell about 100 basis points as investors priced a Bolsonaro win.
Why it matters: with polls tied and odds above 80%, positioning looks skewed towards one outcome, so a Lula victory could force a fast unwind. Vontobel's Thierry Larose argued after the first round that local yields could fall further on a Bolsonaro win than they would rise on a Lula re-election. Whoever wins inherits a fiscal deficit of about 7.5% of GDP and public debt near 95% of GDP, which Neuberger Berman warns could pass 100% without a credible primary-balance adjustment. A Congress tilted to the right, with Bolsonaro's PL set to hold 28 of 81 Senate seats from February 2027, will shape the fiscal path under either president.
Sources
- The Rio Times: Datafolha poll has Flávio 50%, Lula 50%
- The Rio Times: Brazil stocks rise 0.47% before runoff vote
- Al Jazeera: Latest poll shows Bolsonaro maintaining edge over Lula
- MarketScreener: Flavio Bolsonaro takes lead over Lula
- Neuberger Berman: Brazil Election 2026, what it means for EM debt
- RankiaPro: Brazil runoff, the fiscal test ahead