Brazil Election to See Lula, Bolsonaro in Tight Race

New poll puts president Lula da Silva neck and neck with right wing challenger, Flavio Bolsonaro, the son of the former president, Jayer Bolsonaro, ahead of Sunday's presidential election. We're live to Sao Paulo where we're joined by Adriana Dupita, deputy chief emerging markets economist at Bloomberg Economics. So thank you for being with us. So what can we expect from the first round? Thank you, Francine. Well, first round is going to be a very tight race. The... As you said, the polls have it neck to neck, and there is some uncertainty about the turnout and the and the election. This is an election in which both of the leading candidates are hated by half of the population, and there is an intersection that hate both candidates. So I think that the turnout is going to be key to to shape the electoral result. And in that case, we might see some kind of surprising the... When the the votes are counted. So so how could markets react? Markets appear... Apparently give a lot more credit to Flavio Bolsonaro in terms of how he would handle the main economic problems of the country. As it's famous, Brazil is very in-depth... A very, indebted country both in the public sector and in the private sector, and there is a need of a big fiscal consolidation of about two percentage points of the GDP. The thing is that the markets look at this and think that Flavio Bostol has a better shot or has more... Is more willing to do a fiscal adjustment. And because of that, what we have seen in recent weeks is that market market prices, in particular, the currency and the long term yields have oscillated in line with the oscillation in the prediction market bets for who is going to win this election. So if Flava Bostonna appears at the lead in the first round vote, what we will probably see is a market rally. The real could go to stronger than five ten, and the yields could lower by 70 basis points. If it is Lula who is in the lead, and this points to to some comfortable position for Lula's of reelection chances that might probably lead to some deterioration in market asset prices with the weakening to four... Five fifth... 40 and the yield curve pointing in the long long end some additional 100 basis points or something like that. Of course, not all the effect is going to be immediate, and this is also highly conditional on what else is help... Have, happening in the world. And clearly, there's a lot happening in the world at this moment.