Brazil Is Breaking. The Election Was Just The Beginning
The hangover begins
The election is over, but the market is delivering a brutal verdict. Brazilian equities have been crushed on massive volumes, the real has plunged, and bond yields have surged. Beneath the price action, the fiscal outlook is increasingly uncomfortable. Debt is climbing, mandatory spending is squeezing the budget, and Lula faces a hostile Congress just as investors demand credible reform. The political event risk may be behind us, but the economic risks are not. With volatility resetting sharply, the next opportunity may be in trading the uncertainty rather than betting on an outright recovery.