Calm Before the Election Storm

Calm Before the Election Storm

Brazil

Brazilians go to the polls in October to choose a president. This year's elections are unlikely to be as frightening as in 2002, when the rise of Luiz Inácio Lula da Silva triggered a financial crisis that sent the real plunging, bond yields soaring and investors heading for the exits. Indeed, the outlook could hardly be more different this time around, even though the election's outcome is far from certain. Lula seemed invincible until a corruption scandal erupted last June. He has since lost ground in the polls and at least two opposition candidates appear to have a clear chance of victory. But investors remain bullish and keep pouring capital into Brazil. "The electoral process is

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