Crypto News: Brazil’s election slugfest

Brazilians have four weeks to wait to find out who'll be their next president after a surprisingly strong showing by incumbent Jair Bolsonaro prevented a first-round win by the leftist Luiz Inacio Lula da Silva.

While Lula beat Bolsonaro by more than 6 million votes in yesterday's ballot, he fell short of the 50% mark needed for victory. That's even as some pollsters had predicted he'd get over the line, and indeed that the margin over Bolsonaro would be large. Instead, the split was 48% to 43%.

The president secured the states of Sao Paulo and Rio de Janeiro, blunting Lula's strength in the north. His allies also won key gubernatorial and legislative races.

Key reading:

Markets are likely to react positively to the news because even if Lula prevails, he is likely to have less wiggle room to pursue his left-wing agenda through congress.

Lula is a 76-year-old former union leader and is seeking his third term, having governed the nation between 2003 and 2010 (after which he spent time in jail on corruption charges he disputed).

Addressing supporters in Sao Paulo, he likened the outcome to a sporting match that had gone into extra time.

Bolsonaro seemed relatively restrained last night. He didn't repeat his comments aired frequently during the campaign about the electronic voting system being ripe for fraud, though he attacked pollsters for what he called their "lies" in having predicted Lula could romp home.

Mostly, he focused on his desire to better explain the state of the economy to Brazilians, many of whom feel left behind even as growth improves.

Latin America's largest economy is already a deeply polarized nation, where the two lead candidates captured almost 92% of the vote between them without much space for alternatives.

With Bolsonaro heavily on the right and Lula on the left, the prospects for volatility are high. — Juan Pablo Spinetto

Lula supporters react to the vote count in Rio de Janeiro. Photographer: Pedro Prado/Bloomberg

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