Lula Leads After Last-Minute Voting Extension As "Bolsonaro Trade" Implodes; Trader Warns Of "Circuit Breaker" Chaos
Summary:
- NYT: Several electoral lawyers say today's vote could be annulled
- With 99.7% of ballots counted, Lula has 51.8% of the vote, while Bolsonaro has 48.2%.
- Brazilian Supreme Court Judge Extends Voting Time By Two Hours
- Brazil Runoff Enters Final Hour: Left-Right Showdown Could Reshape Latin America's Political Balance
Election Could Be Annulled
New York Times reporter Adam Ellick reports:
Several electoral lawyers say today's vote could be annulled due to confusion over the late decision to extend voting hours. All four lawyers interviewed call the situation unprecedented.
"This is an extremely serious, critical situation," said Priscilla Sodré Pereira, an electoral lawyer. Supreme Court Justice Cristiano Zanin decided, minutes before polls closed, to extend all polling stations by two additional hours.
By the time of the announcement, some polling centers had already closed, their voting machines had shut down, and they could not reopen.
Fernando Neisser, an electoral law professor at Fundação Getulio Vargas, a Brazilian research institute, said the election could be annulled if the margin is very narrow and it is shown that polling stations stayed open longer in areas that strongly favor one candidate.
Meanwhile ...
The Soros family knows how to fix elections.
— Katie Miller (@KatieMiller) October 26, 2026
Latest Election Update
With 99.7% of ballots counted, Lula has 51.8% of the vote, while Bolsonaro has 48.2%.
8 hours ago, Bolsonaro was 82% odds on to win...
Earlier, Lula asked a Brazilian Supreme Court judge to extend voting nationwide by two hours.
That likely allowed...
done and done: the steal is in Pollster Datafolha is now projecting Lula as the winner of Brazil’s presidential election
— zerohedge (@zerohedge) October 25, 2026
"If a conservative government in Brazil did this, everyone in the mainstream press in America would lose their minds, but I guess they're just choosing to be silent because it's all for the cause," Donald Trump Jr. wrote on X, commenting on Lula's last-minute request to extend voting.
If a conservative government in Brazil did this, everyone in the mainstream press in America would lose their minds, but I guess they’re just choosing to be silent because it’s all for the cause.
— Donald Trump Jr. (@DonaldJTrumpJr) October 25, 2026
In markets, Hyperliquid's Brazil ETF perpetual crashed nearly 30% as the "Bolsonaro trade" unwinds.
Bloomberg analyst Felipe Saturnino cited Isabela Fukase, a fixed-income portfolio manager at Tivio Capital, who warned: "There will be a 'circuit breaker' in Brazil stocks and DI rates tomorrow" if Lula is confirmed as the winner.
Fukase said that, in that scenario, swap rate futures would rise "more than 150 basis points easily, 200 basis points," while the Brazilian real would likely fall about 10%.
All it took for Lula and the socialists was to extend the election. This will probably be challenged.
Brazilian Supreme Court Judge Extends Voting Time By Two Hours
AFP News reports that a Brazilian Supreme Court judge extended voting nationwide by two hours after complaints that public transport problems had hindered access to polling stations.
Justice Cristiano Zanin ordered polling stations to remain open until 7 p.m. local time, or 6 p.m. in New York, following a request from President Luiz Inácio Lula da Silva.
One key question is whether the additional voting window boosts turnout in Lula's favor. The transport complaints also raise questions about cheating.
Hyperliquid's Brazil ETF perpetual dropped 3.5% on the news.
Brazil Runoff Enters Final Hour: Left-Right Showdown Could Reshape Latin America's Political Balance
Brazilians began voting early Sunday in a presidential runoff, with right-wing Senator Flávio Bolsonaro and socialist President Luiz Inácio Lula da Silva statistically tied. Bolsonaro won the first round at the start of the month.
Nearly 160 million people are eligible to vote today, with polling stations closing at 1600 ET. A last-minute AtlasIntel survey for Bloomberg, released Saturday, showed Bolsonaro leading Lula 51% to 49%, largely in line with other final polls. The survey's margin of error was 1 percentage point.
Regular readers will remember that polls showed Lula ahead going into the first round, but Bolsonaro finished ahead with 47.03% of valid votes to Lula's 45.16%.
Goldman's chief Latin America economist, Alberto Ramos, provides the latest in his runoff Q&A (available to pro subscribers):
"The race has tightened considerably. Polls immediately after the first round gave conservative Bolsonaro a 4- to 5-point lead over left-wing incumbent President Lula in the October 25 runoff. His lead has since narrowed to 0 to 2.5 points, with one outlier, Vox, showing Lula slightly ahead. Prediction markets still favor Bolsonaro, but the odds are less lopsided than immediately after the first round."
Here is Goldman's poll-of-polls, which shows Bolsonaro's lead eroding in the final stretch (chart source: GS GIR):
And here is the full scorecard by pollster. Goldman's average still puts Bolsonaro ahead 51% to 49%, a 2-point lead right on the edge of most surveys' margin of error. Note how many arrows point down: in almost every poll, the senator's lead is smaller than it was in that pollster's previous survey.
Polymarket gives Bolsonaro an 82% chance of winning the runoff, while Lula's odds are around 20%.
Post-Election Market Outlook:
UBS analyst Kyle Duca adds more color to FX impact on election results:
Trading and strategy see a wide two-way range for BRL around the presidential runoff, but distinguish between the likely FX and rates reactions in each outcome.
The FX trading desk sees a Lula win pushing USDBRL toward 5.40-5.45, where the move could run out of steam as higher rates bring the carry trade back into play and encourage USDBRL selling.
On a Flavio win, trading sees more of a rates story, with USDBRL likely moving toward 4.90-4.80 before interest to clean up emerges. A sharp rates rally and diminished carry could then leave FX consolidating around those levels.
FX Strategy sees USDBRL at 4.70-4.80 if Flavio wins 52%-48%, with less upside for BRL if the margin is below 1%. A Lula victory would put USDBRL at 5.30-5.50.
The "Bolsonaro trade" is already gaining momentum ahead of the runoff.
The black line, Hyperliquid's Brazil ETF perpetual, has surged to $45.16, about 6% above the iShares MSCI Brazil ETF (EWZ), which closed at $42.59 on Friday.
By this evening, Brazilian voters will decide whether to accelerate Latin America's rightward shift or extend a failed left-wing economic agenda that risks deeper deficits, a mounting debt pile, higher interest rates, more economic gloom, and faltering investor confidence. A Bolsonaro win would cement the continent's rightward shift.