Brazil Markets Slump

BrazilReal futures fell 10% as Lula beat the market’s pick.

Brazil’s debt is about 82% of GDP, and its central bank’s policy rate sits at 13.75%.

Investors had priced a Flávio Bolsonaro win and austerity, then Lula took 51% promising free weekend transit and debt forgiveness.

Deutsche Bank’s Jim Reid said a more rightwing Congress should limit how much looser Lula’s budget can get.

Investors said the real could weaken from R$5 to R$5.20 per dollar or beyond.

Sources: Financial Times News