Energy Over Politics for Now
Brazil's polls tighten, but BRL can shrug it off.
A BTG Pactual/Nexus poll published yesterday showed Brazil's President Lula da Silva and Senator Flavio Bolsonaro tied at 46% in a potential run-off in the October elections.
Even though the election is far off, the sharp ground being made up by the junior Bolsonaro is notable and worthy of attention, especially given our most recent trade implementation of long BRL/JPY from Energy Is Repricing Carry last week.
We believe it is wise to map out the currency implications for the polling shift based on political movements to see if the risk is worth carrying.