Brazilian markets got very bullish after learning about the results of the first round of the presidential elections. To some analysts, a much narrower-than-expected gap between frontrunner Luiz Inácio Lula da Silva and incumbent Jair Bolsonaro created a win-win scenario for Brazilian assets: it showed that Mr. Bolsonaro could still flip the election in the runoff, which should force Lula to keep leaning to the center.
So, the economic policy from next year would be either more Paulo Guedes (I will leave my evaluation of his performance for a future article, but markets still seem to like him, at least…