Elections 2026: Market puts dispute ‘in the price’ a year and a half before the usual

Almost a year and a half of the presidential elections in Brazil, the effect that the fall of popularity of the Lula administration may have on the election and economic policy is already being priced by the financial market.

It is quite an advance, since, traditionally, this effect is only seen five months before the election, said David Becker, executive of Anbima (Brazilian Association of Financial and Capital Markets entities).

“Historically, in previous cycles, the elections were priceed in May of the election year. But it is obvious that this year popularity polls are already impacting prices, ”said the executive during lunch of the entity with journalists. “But it’s still very distant, a lot can happen. It is very difficult to operate elections right now, ”he added, who is also head of economy and strategy of Bank of America.

He explained that the discussion of the market is about which economic policy will be implemented by the next government. “Because the economic cycle can affect fiscal policy in the short or medium term, the politician is used to think about the conduct of the economic policy,” he explained.

According to him, investors out there exaggerated pessimism compared to emerging markets, including Brazil, and this has been corrected with the recovery of the scholarship and falling the dollar this year.

“2024 was a good year for the economy and bad for markets. This year we will have an economy slowing down and a better year for prices, ”he said.

IPOS drought

During lunch with journalists, the president of Anbima, Carlos André, said that 2025 will be, at first, again characterized by the absence of Ipos. This is because of the basic high interest rate – the projection of the market is that Selic will finalize the year at 15% per year.

This scenario may change if there is improvement in the stock market precipitated by the perception of foreigners about Brazil, as the scholarship is very devalued.

“The trigger (for new Ipos) can be improvement in the stock market, especially by foreign investors, that there is price opportunity,” said André.