Brown Brothers Harriman’s (BBH) Elias Haddad says the Brazilian Real (BRL) and local assets are poised to open higher after Flávio Bolsonaro’s stronger-than-expected first-round election result. Haddad adds that Bolsonaro’s momentum ahead of the October 25 runoff, together with proposals for faster fiscal repair and lower taxes, reinforces a positive BRL outlook already supported by Brazil’s attractive carry and strategic commodity exposure.

Flávio Bolsonaro momentum boosts Real

“BRL and Brazilian assets are poised to open higher after Bolsonaro’s stronger than expected showing in the first round of the presidential election.”

“Rightist Senator Flávio Bolsonaro of the Liberal Party (PL) won roughly 47% of the vote against 45% for leftist President Luiz Inácio Lula da Silva of the Workers’ Party (PT), overturning the narrow lead most polls had given the incumbent.”

“The result gives Bolsonaro momentum heading into the October 25 runoff.”

“Bolsonaro’s plan for faster fiscal repair and lower taxes would add to the positive BRL outlook, already underpinned by Brazil’s attractive carry and strategic exposure to commodities linked to energy, AI, and defense.”