Ibovespa Opening Delayed as B3 Triggers Circuit Breaker
The Ibovespa’s opening was delayed on Monday after B3 triggered a circuit breaker as Brazilian assets plunged following President Lula’s victory over Senator Flávio Bolsonaro in the presidential runoff. The selloff reversed the optimism that had supported Brazilian assets since the first round, when Bolsonaro outperformed polling estimates and finished ahead of Lula. Markets had widely viewed a potential Bolsonaro administration as more likely to rein in public spending, which investors consider essential to lowering interest rates. Investors are now reassessing fiscal risks, including the persistence of primary budget deficits and the trajectory of public debt, as well as institutional risks related to controversies surrounding the electoral process. Meanwhile, Brazil’s National Treasury canceled the fixed-rate and inflation-linked bond auctions scheduled for Tuesday and Thursday, while maintaining Tuesday’s auction of securities linked to the benchmark Selic rate.
The Ibovespa’s opening was delayed on Monday after B3 triggered a circuit breaker as Brazilian assets plunged following President Lula’s victory over Senator Flávio Bolsonaro in the presidential runoff. The selloff reversed the optimism that had supported Brazilian assets since the first round, when Bolsonaro outperformed polling estimates and finished ahead of Lula. Markets had widely viewed a potential Bolsonaro administration as more likely to rein in public spending, which investors consider essential to lowering interest rates.
Investors are now reassessing fiscal risks, including the persistence of primary budget deficits and the trajectory of public debt, as well as institutional risks related to controversies surrounding the electoral process. Meanwhile, Brazil’s National Treasury canceled the fixed-rate and inflation-linked bond auctions scheduled for Tuesday and Thursday, while maintaining Tuesday’s auction of securities linked to the benchmark Selic rate.