Analysis: Market looks less at names and more at fiscal risk when pricing 2026

The markets’ reaction to the 2026 electoral scenario has been guided less by the dispute between names on the right and more by reading about the direction of fiscal policy in the next government. The assessment was made by XP policy analyst, Victor Scalet, in an interview with the program Mapa de Risco, from InfoMoneywhich aired on Friday (23).

Since the announcement of Flávio Bolsonaro’s (PL-RJ) pre-candidacy in October, the market has followed a continuous process of the senator’s consolidation in the polls. This movement, which had already been observed since December, was repeated in different surveys released in recent weeks.

The latest round of AtlasIntel, released this Wednesday (20), in the scenario in which Flávio Bolsonaro divides the conservative camp with Tarcísio de Freitas (Republicans), President Lula (PT) appears with 48.4% of voting intentions, while the senator registers 28% and the governor of São Paulo has 11%. Among voters who say they voted for Bolsonaro in 2022, the difference is clear: 59.2% migrate to Flávio, against 21.1% for Tarcísio.

The analyst highlights that, in addition to electoral polls, investors’ reading is not centered on the choice between Flávio Bolsonaro or the governor of São Paulo, Tarcísio de Freitas. “The big question for the market is the inspector at the end. I think it’s less of a question about candidacy, whether it’s Flávio, whether it’s Tarcísio, whether it’s together, whether it’s separate,” he said.

For Scalet, the focus is on identifying “which candidate will have the greatest desire, the greatest desire to make the necessary adjustments” and, above all, “which candidates will have the political condition, after being elected, to be able to put this plan into practice”.

Switching and reading assets

In the analyst’s assessment, the market reacts more positively when the electoral scenario suggests an open dispute and a chance of alternating power. This perception tends to ease asset prices, especially on the Stock Exchange, by fueling expectations of a change in fiscal conduct from 2027 onwards.

Scalet considers, however, that part of the recent movement in Brazilian markets was also influenced by external factors. “There was a flow of money coming from abroad that was quite relevant for determining the prices of local assets,” he stated. According to him, this flow helped both the Stock Exchange and the exchange rate, while the interest curve benefited to a lesser extent.

When comparing Flávio Bolsonaro and Tarcísio de Freitas, the analyst assesses that the difference perceived by the market is less in the economic agenda and more in electoral viability. “I think it has been less about the difference in economic policy between Flávio and Tarcísio and more about the difference in perception of the probability of victory,” he said.

According to Scalet, in conversations with investors, the prevailing view is that Tarcísio would today have a better chance in a possible second round against President Luiz Inácio Lula da Silva.

Electoral probability and uncertainty

Scalet observes that Flávio Bolsonaro is on a trajectory of gradual growth in research, while Tarcísio appears to be in a movement of stagnation in these scenarios. “We don’t know where this movement will end,” he said. For him, the market is still trying to calibrate these probabilities and understand who would be better able to beat Lula, seen by investors as a continuation of the current government.

“The doubt there, in the end, is always the inspector”, he summarized. According to the analyst, the market is trying to answer who can reach the Planalto and who would have the greatest capacity to “resolve the fiscal situation in the medium term”, a factor that remains the main risk vector in the pricing of Brazilian assets.