“Latest opinion polls suggest Brazilian voter intentions have been remarkably steady in recent months. That could change given the high level of undecided voters, the start of TV ad campaigns and a court decision regarding the candidacy of the jailed former president Lula,” argue ING analysts.
Key quotes
“The biggest change in local market sentiment towards the Brazilian election over the past month has been a more constructive assessment regarding the ability of the establishment candidate, Geraldo Alckmin, to win the race, following the consolidation of a broad party alliance network.”
“The candidate’s association with the political establishment, which deepened with the alliances that closely mirror President Temer’s support base, suggests that Alckmin is vulnerable to deeply felt voter dissatisfaction with the political class and strong anti-establishment sentiment. His troubling performance in his home state where, despite his good reputation and name-recognition, Bolsonaro appears to maintain a narrow lead also raises questions about his viability in this electoral cycle.”
“Polls are likely to be the main domestic drivers for local assets going forward. The chief market assumption is that Alckmin will rise in polls once the TV/radio ads start airing on August 31. But the longer it takes for the candidate to rise, the more anxious investors are likely to become.”
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