Brazil Real Hedging Costs Hit Highest Since 2011 Ahead of Runoff
Photo: TokenPost
Hedging costs for exposure to Brazil’s real have climbed to their highest level since 2011, as one-month risk reversals rose ahead of a closely contested presidential runoff on Sunday, Oct. 25. President Luiz Inácio Lula da Silva is facing Sen. Flávio Bolsonaro in the runoff. Recent polls show nearly equal support for the candidates, while concerns about political instability have increased demand for hedging instruments. The higher costs may reflect expectations of volatility in response to the election outcome. The development adds to market activity around the race; Goldman Sachs’ Brazil desk saw record trading after Bolsonaro’s first-round lead .
Source: TokenPost
