Wall Street weighs Brazil election outcomes as vote nears

Wall Street is watching Brazil’s presidential election closely as investors consider very different market outcomes depending on whether Luiz Inacio Lula da Silva or Flavio Bolsonaro prevails in the first round or a later runoff. The article says markets have generally favored Bolsonaro because of expectations for more fiscal discipline and potential reform. Brazilian stocks, bonds and the currency have recently moved alongside his improving poll numbers, while analysts at firms including JPMorgan and Citi have highlighted the country’s debt burden and the need for longerterm fiscal adjustment. Analysts also say the election could affect interest rates, the real and the MSCI Brazil index, though they note that some of the optimism may already be reflected in prices. The composition of the legislature will also matter for any reform agenda, while external risks such as higher global rates and El Niño remain important for the region.