Today is the day. Around 160 million Brazilians head to the polls for the first round of the presidential election, and investors are bracing for sharp swings in Brazilian assets tonight, no matter who comes out ahead. The race has been too close to call, so markets could not take a strong view going in, which means they will adjust fast once the numbers print. Here is what happens today and why the real and the Ibovespa could whipsaw. For the deeper setup, see our election markets preview.
The Vote Today
Polls are open from 8 a.m. to 5 p.m. in Brasilia. Brazil uses electronic voting machines, so the official count from the TSE comes quickly, usually within a few hours of polls closing, with results updating in near real time through the evening. Voters are choosing a president, governors, and national and state legislators in one go.
Too Close to Call
The final polls left the presidential race on a knife-edge. Datafolha's last survey put Lula at about 45% of valid votes to Flavio Bolsonaro's 40%, with a likely runoff essentially tied at 48% to 45%. Because no candidate looks able to clear 50% outright, the most probable outcome is a second round on October 25, exactly as every Brazilian presidential race since 2002 has gone, which we explain in our runoff guide.
Why Markets Will Swing Either Way
With the race neck-and-neck, traders could not position strongly beforehand, so Brazilian assets are set to react fast once results land. The two paths look very different: a strong showing for the opposition is the outcome investors tie to fiscal austerity and a market-friendly rally in stocks, bonds and the real, while continuity under Lula points to more social spending and the fiscal worries hanging over the market. We broke down both in Wall Street's two scenarios. Either way, expect volatility tonight and, if it goes to a runoff, three more weeks of it.
What US Investors Are Watching
For US investors, the event plays out through the iShares MSCI Brazil ETF (EWZ) and ADRs like Petrobras (PBR), Vale (VALE) and Itau (ITUB), plus the B3 names on our Brazilian stocks hub. The sensible move is less about calling the winner and more about sizing for a sharp move in either direction.
Frequently Asked Questions
When will Brazil's election results be known?
Polls close at 5 p.m. in Brasilia and, because voting is electronic, the TSE count comes quickly, with a clear picture usually within a few hours that evening.
Will there be a runoff?
Very likely. The final polls showed no candidate near the 50% needed to win outright, so a second round on October 25 is the probable outcome, as in every Brazilian presidential race since 2002.
Why are Brazilian markets expected to swing?
The race was too close to call, so investors could not position strongly in advance. Once results land, assets adjust fast, and the two possible outcomes imply very different fiscal and market paths.
The Bottom Line
Brazil votes today in a race that has kept investors guessing, and the result, or the lack of an outright winner, will set the tone for the real and the Ibovespa in the hours ahead. With a runoff the most likely outcome, tonight may settle who the two finalists are rather than who wins. For US investors, the playbook is simple: expect sharp moves, size for volatility, and watch EWZ and the big ADRs for the reaction.
This article is for informational purposes only and is not financial advice. As of writing, first-round results had not been finalized. Always do your own research before investing. Further reading: Brazilwood, Gold, and Graft: 500 Years of Wealth Leaving Brazil, by the Numbers.
