Brazil’s Far-Right Is Surging — Investors Love It

Brazil's market rally on a far-right congressional sweep is speculative, per de Bolle, while a stalling U.S. labor market and weakening SEC enforcement raise separate red flags.

• Market vs. reality gap: Brazil's Ibovespa jumped 9% intraday (biggest gain since April 2020) and the real rose 4% after Flavio Bolsonaro (47%) edged Lula (45%) into an October 25 runoff, but de Bolle calls the rally pure speculation given neither candidate has addressed fiscal sustainability or Brazil's high debt-to-GDP.
• Far-right sweep below the surface: The PL party won 121 of 573 lower-house seats (a historic record) and five governorships (two more likely), giving it real power-consolidation momentum de Bolle says will mean MORE spending, not fiscal discipline.

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