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But the results of the first round are recalibrating how investors are pricing what the final decision will be.
Speculators on prediction market platform Kalshi now give Bolsonaro a more than 80% chance of winning the presidency. Before Sunday’s first round results came in, he had about a 60% chance to win. On Polymarket, Bolsonaro’s odds are now 85%, jumping from 63% before the first round count.
If no candidate receives a majority of the votes in a first round Brazilian presidential election, the two who get the most votes advance to a run-off.
Brazilian assets were on the rise following the result.
The iShares MSCI Brazil ETF (EWZ) was up more than 12% on Monday. U.S.-listed shares of Itau Unibanco gained 15%, and Banco Bradesco surged 19%. Brazil’s local Bovespa index was up 8%.
iShares MSCI Brazil ETF 1-day chart.
Investors broadly saw Bolsonaro as more favorable to markets, as the candidate is promising greater fiscal discipline. In June, Brazil’s deficit-to-GDP ratio was almost 10%.
Lula is running for a fourth term as president. He won back the presidency in 2022 — after a 12-year stint out of the office — where he defeated then-incumbent Jair Bolsonaro. Lula’s campaign has tried to tie Flávio Bolsonaro to his father’s efforts to contest his 2022 loss and brand the son as corrupt.
The run-off in Brazil will take place on Oct. 25.
Disclosure: CNBC and Kalshi have a commercial relationship that includes customer acquisition and a minority investment.
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