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Bolsonaro Headlines May Spur Short-Term Uncertainty

BRAZIL
  • Late pressure on local assets on Tuesday as the following headlines crossed the wires:
    • BOLSONARO ASKS COURT TO ANNUL VOTES IN BRAZIL ELECTIONS (BBG)
    • BOLSONARO'S PARTY CONFIRMS REQUEST TO ANNUL VOTES IN ELECTION (BBG)
  • CNN Brasil reported that the current President is now asking the Superior Electoral Court to annul votes from the 2022 Presidential election amid irregularities. USDBRL continued to inch higher throughout the session and despite moderating into the close, is pushing back towards 5.40 in early trade on Wednesday.
    • While local analysts appear confident the current president’s challenge won’t succeed, they highlight could still get rocky in coming weeks as pro-Bolsonaro protests continue & some in his party potentially push for more radical steps.
  • Overall, Ibovespa futures are little changed as market participants continue to await details on President-elect Luiz Inacio Lula da Silva’s future cabinet and a bill that would exclude some social expenditure from the cap on fiscal spending.
  • Late on Tuesday, Senate President Rodrigo Pacheco told journalists that a proposal to remove the Bolsa Familia social program from Brazil’s spending cap rule indefinitely won’t win congressional support.
  • Central bank President Roberto Campos Neto grants lecture during BlackRock Brasil event in Sao Paulo at 12:30pm.
  • Separately, the transition political team holds meeting at 9:30am local time.
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  • Late pressure on local assets on Tuesday as the following headlines crossed the wires:
    • BOLSONARO ASKS COURT TO ANNUL VOTES IN BRAZIL ELECTIONS (BBG)
    • BOLSONARO'S PARTY CONFIRMS REQUEST TO ANNUL VOTES IN ELECTION (BBG)
  • CNN Brasil reported that the current President is now asking the Superior Electoral Court to annul votes from the 2022 Presidential election amid irregularities. USDBRL continued to inch higher throughout the session and despite moderating into the close, is pushing back towards 5.40 in early trade on Wednesday.
    • While local analysts appear confident the current president’s challenge won’t succeed, they highlight could still get rocky in coming weeks as pro-Bolsonaro protests continue & some in his party potentially push for more radical steps.
  • Overall, Ibovespa futures are little changed as market participants continue to await details on President-elect Luiz Inacio Lula da Silva’s future cabinet and a bill that would exclude some social expenditure from the cap on fiscal spending.
  • Late on Tuesday, Senate President Rodrigo Pacheco told journalists that a proposal to remove the Bolsa Familia social program from Brazil’s spending cap rule indefinitely won’t win congressional support.
  • Central bank President Roberto Campos Neto grants lecture during BlackRock Brasil event in Sao Paulo at 12:30pm.
  • Separately, the transition political team holds meeting at 9:30am local time.