Brazilian markets surged on Tuesday as a congressional farm caucus endorsement and stronger polling for far-right presidential candidate Jair Bolsonaro boosted expectations that he may block the leftist Workers Party from returning to power.
The benchmark Bovespa stock index jumped 3.6 percent, flirting with a four-month high, and Brazil's currency, the real, strengthened 2.4 percent, on track to close below 4 per dollar for the first time in six weeks.
"Bolsonaro's tide is rising," the Guide brokerage firm wrote to clients in a Tuesday research note. "Many forecast that Bolsonaro would not grow more in the polls. But last night's numbers show the opposite."
As the former Army captain consolidates his position in an increasingly polarized election, a survey by polling firm Ibope released late on Monday showed Bolsonaro building a 10-point lead over second-place Workers Party candidate Fernando Haddad ahead of Sunday's first-round vote.
In the likely case of an Oct. 28 runoff vote — required by Brazilian law if no candidate wins a majority in the first round — the Ibope poll showed Bolsonaro in a dead heat with Haddad, with 42 percent approval each.
People carry a banner reading "Not Him" during a demonstration against Brazilian presidential candidate Jair Bolsonaro, in Sao Paulo, Brazil, Sept. 29, 2018.
The Parliamentary Agricultural Front, which includes over 260 senators and lower-house representatives, formally endorsed fellow lawmaker Bolsonaro, whose hard-line rhetoric on crime garnered early support from Brazil's farm belt, where booming plantations are threatened by land invasions and robberies.
Bolsonaro celebrated the endorsement in a video released over social media. He pledged to combine the Agriculture and Environment ministries, which he said would solve many of the farm sector's problems, without elaborating.
Among female voters, Bolsonaro got a solid 6 percentage-point bump in the Ibope survey, compared with the same poll a week ago.
That came despite the candidate's history of misogynistic comments and a weeklong social media campaign using the #elenao — or #nothim — hashtag in opposition to him. Last weekend also saw the largest female-led street demonstrations Brazil has seen in decades, denouncing the candidate.