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Brazil's first-round election results diverged sharply from polls, with right-leaning Jair Bolsonaro taking 46% of the vote and leading Fernando Haddad by a wide margin. The result reflected an anti-establishment wave tied to recession and Lava-Jato corruption revelations.
Expectations of a market-friendly government support the real and Brazilian assets, which can affect the export competitiveness of Brazilian soybeans, corn and meal and therefore global feed prices.
think.ing.comOct 8, 2018After 13 past bearish policy events, USDBRL moved a median -3.4% over 5 sessions (15% higher; middle half -3.4% to -1.3%), and -1.9% over 20.
After 206 past neutral policy events, SBM moved a median -0.4% over 5 sessions (44% higher; middle half -2.3% to +1.8%), and -0.7% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The first-round result diverged from polls with Bolsonaro at 46%, a surprise that shifted election expectations and drove the repricing of BRL.
The first-round result diverged from polls with Bolsonaro well ahead, surprising markets and driving the repricing of Brazilian political risk behind the currency move, though this is context rather than the direct market reaction.
