Brazilian future rates plunge, hit oscillation limits as Bolsonaro leads Lula in first round

Brazilian interest rate futures fell sharply at market open after first-round election results showed Flávio Bolsonaro ahead of Lula by under two percentage points, triggering daily oscillation limits on 2-6 year maturities. The market is pricing an increased probability of an opposition victory, which investors interpret as a shift toward more market-friendly fiscal policy. The result is preliminary and a second round is likely, leaving the final outcome uncertain.