In Brazil Lula will have to negotiate with the centre to win the runoff

Lula da Silva (PT) won the first round of the presidential election with 48% of the votes. He is favourite to beat Jair Bolsonaro (PL), who tracked him by 6mn votes, in a runoff in four weeks.

What you will learn:

• Lula’s PT party, however, was largely defeated in the legislative elections, meaning Lula would have to form a wide coalition with his former opposition to be able to govern with stability.
• We think this is as close as possible to a best-case scenario for investors. Confirming this view is the 5% rally in the Brazilian real today, which is trading at a two-month high of 5.16/$.