# Analysts forecast Brazil market plunge after Lula turnaround win By Reuters

> Reuters reports that Lula's election victory over Flavio Bolsonaro was set to trigger a sharp selloff in Brazilian markets. Morgan Stanley estimates a roughly 200bp repricing of fiscal risk and sees USD/BRL testing 5.50, with a bear case of 6.00 if spending cuts are not committed.

- Date: 2026-10-26 · published 2026-10-26T12:00:00.000Z
- Category: macro · region Brazil · magnitude medium
- Page: https://feedsoft.ai/events/17286-analysts-forecast-brazil-market-plunge-after-lula-turnaround-win-by-reuters
- Commodities: [Brazilian Real (BRL per USD)](https://feedsoft.ai/c/USDBRL.md)

## Why it matters

Analyst forecasts of a weaker real raise the dollar cost of Brazilian soybean and corn exports and of imported feed inputs. The scenarios also show how fiscal credibility could push the currency further.

## Read by commodity

- USDBRL: bullish ▲

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDBRL | 2026-10-26 | 1 | +7.9% | 9.3 | Reuters analysts forecast a roughly 200bp fiscal-risk repricing and a USD/BRL selloff, explaining the sentiment and fiscal mechanism. |
| USDBRL | 2026-10-26 | 5 | +7.6% | 5.6 | Analysts forecast a fiscal risk repricing of about 200bp and USD/BRL testing 5.50 or higher, which fits the depreciation mechanism. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDBRL | 2026-05-13 | [Brazil markets rattled by report linking Flavio Bolsonaro to disgraced banker \| Reuters](https://feedsoft.ai/events/19462-brazil-markets-rattled-by-report-linking-flavio-bolsonaro-to-disgraced-banker.md) | +2.9% | +5.6% |
| USDBRL | 2024-06-25 | [Lula’s spending plans turn heat on Brazilian markets](https://feedsoft.ai/events/29989-lula-s-spending-plans-turn-heat-on-brazilian-markets.md) | +3.4% | +3.1% |
| USDBRL | 2026-10-26 | [Euro falls against dollar; Brazilian real tumbles after Lula election win](https://feedsoft.ai/events/17282-euro-falls-against-dollar-brazilian-real-tumbles-after-lula-election-win.md) | +7.6% | — |
| USDBRL | 2024-12-18 | [Brazil's real hits record low as markets eye govt spending \| Reuters](https://feedsoft.ai/events/27143-brazil-s-real-hits-record-low-as-markets-eye-govt-spending-reuters.md) | +1.3% | -1.1% |
| USDBRL | 2026-10-26 | [Brazil’s real sinks after Lula’s re-election victory \| Financial Markets News \| Al Jazeera](https://feedsoft.ai/events/17283-brazil-s-real-sinks-after-lula-s-re-election-victory-financial-markets-news-al.md) | +7.6% | — |

## Sources

- investing.com: https://www.investing.com/news/economy-news/analysts-forecast-brazil-market-plunge-after-lulaturnaround-win-4972685

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.