Lula's re-election odds tumble as Bolsonaro's son leads first round

Flávio Bolsonaro's first-round lead sent the real up more than 4% and the Ibovespa to a record

In one line: Flávio Bolsonaro defeats Lula in Brazil's second round, and a 14% chance for Lula still overstates his odds of a comeback.

Flávio Bolsonaro leads Luiz Inácio Lula da Silva after the first round of Brazil's presidential election, latintimes reported on 8 Oct. Investors cheered the result. The real rose more than 4% and the Ibovespa, São Paulo's main share index, hit a record. The same day a panel of five Supreme Court judges convicted his father, former president Jair Bolsonaro, of plotting a coup and sentenced him to 27 years in prison, headtopics reported.

Traders on Polymarket cut Lula's chance of winning from 40% on 2 Oct to 14% on 9 Oct, a fall of 26 points over the 7 days. He touched 11% on 8 Oct and has recovered 3 points since that low, though he lost 2.0 points in the last 24 hours. Flávio Bolsonaro's contract in the same event trades at 86%. Kalshi prices the same question almost identically, at 13% for Lula and 86% for Bolsonaro. Two independent books that agree make a sturdier forecast than either alone.

The contract stays open past its 5 Oct resolution date because its rule says: "This market includes any potential second round." No winner has been reported, so that part of the rule is not yet met. The facts and the price point the same way. A first-round lead that lifts a currency by 4% shows that money in Brazil's own markets reads the race as traders do. The venue's second-round margin contracts put the most weight on a Bolsonaro win by 4 to 8 points, at 47%.

Flávio Bolsonaro beats Lula in the second round, and Lula's 14% still overstates his chance. Lula's backers have one good argument: a first-round lead is not a win, and his price bounced off 11%. They are right if credible reporting declares Lula the winner of the second-round count. A Bolsonaro win would bear out the bet behind the real's jump, and Mother Jones and The Guardian reported on 8 Oct that it would raise the risk of Amazon deforestation over the next four years.

Sources