The Rio Times LatAm Market Brief
Friday, October 2, 2026
By Matthias Camenzind, Publisher
Brazil votes on Sunday. Lula leads by five points — and needs 50% to end it in one round
A Datafolha poll taken from 29 September to 1 October puts Lula on 45% of valid votes and Flávio Bolsonaro on 40%, with a two-point margin of error. Lula skipped the last TV debate, which Globo then cancelled, and called his rival a “mongrel” on a podcast. From Paris, Argentina's Javier Milei said he hopes his “friend Flávio” wins. If nobody clears half of the valid votes, Brazil votes again in a runoff on 25 October.
Brazil asked police to investigate a reported US$1 million US grant aimed at its Supreme Court
Brazil's index rose for a third day, the only gainer in the region
Chile's peso hit its weakest in more than a year, with 1,000 per dollar in view
Argentina's country risk rose to about 636, its highest since December
The state of the region
If you missed the last few days
On Monday we led with Brazil's courts, and yesterday we noted that a third of voters told one pollster they might still switch. Since then the last TV debate has been cancelled, Argentina's president has picked a side, and the government has gone to the police over a US grant. Two days out, very little of this campaign is happening in a studio.
Good morning. Brazil elects a president on Sunday, and the main poll has a clear leader but not yet a winner. Datafolha, polling from 29 September to 1 October, puts Lula on 45% of valid votes and Senator Flávio Bolsonaro on 40%. Valid votes leave out blank and spoiled ballots, and a first-round win needs more than half of them. On these numbers nobody gets there, and Brazilians would go back to the polls on 25 October.
The final week has been fought away from the cameras. Lula chose the Flow podcast over TV Globo's last debate; Globo then called the debate off, citing legal uncertainty after rulings by the electoral court and a Supreme Court justice. On the podcast Lula called Flávio a “vira-lata”, a mongrel, for sending his brother Eduardo to the US “to speak ill of Brazil”. In Paris, Milei told Le Point he hopes “my friend Flávio Bolsonaro” wins, and called Lula a thief again. And on Thursday the government's legal arm asked police to look into a reported US grant for groups opposed to the Supreme Court — more on that below.
The market has taken all of it calmly. The Ibovespa rose 0.46% to 187,197 on Thursday, its third straight gain and the only rise among the region's main indices, with Petrobras up 1.32%. The real weakened 0.84% to 5.2176, but that was the dollar, not Brazil: the Mexican and Chilean pesos lost more, and every other main index in the region fell. If investors fear Sunday, the index does not show it yet.
Why it matters: A first-round win would settle Brazil's direction on Sunday night. Anything short of it means three more weeks of the campaign this week showed — foreign leaders taking sides and questions about US money in Brazilian politics. For anyone with money or business in Brazil, the number to watch on Sunday is not who leads but whether the leader clears half of the valid votes. A runoff is not a crisis; it is three more weeks in which the real trades on every poll.
Markets & commodities
Thursday's close, 1 October. FX reference exchangerate-api.
IBOVESPA
187,197
+0.46%; third gain
MEXICO IPC
63,829
−0.60%; peso 18.30
CHILE IPSA
10,908
−0.56%; peso 986
ARG MERVAL
2,758,840
−2.15%; low since May
COLCAP
2,530
−0.75%; peso ~3,310
REAL · BR
5.2176
−0.84%; dollar firmer
OIL FUNDS
+4.76% / +2.99%
Brent (BNO) / WTI (USO)
GOLD
US$4,182
+0.63%
Only Brazil rose. Mexico's index fell 0.60% and the peso weakened to 18.30 per dollar. Chile's peso lost 1.40% to 986.18, its weakest since April 2025, after August activity shrank 1% on a mining slowdown. Argentina's Merval fell 2.15% to its lowest close since mid-May, led by the banks, as country risk climbed to about 636 basis points. Even after three gains, São Paulo sits 5.8% below its 52-week high. Copper fell 1.1% in London to a two-week low of US$14,253.50 a tonne; gold rose 0.63% to US$4,182.
The full market reports: Brazil · Mexico · Chile · Colombia · Argentina · oil · copper · gold
Where the countries stand
BrazilThe vote leads today. Under it, industry is weakening: the manufacturing PMI fell to 44.8 in September, and the third quarter was the weakest since 2023. Federal Police indicted 13 people in the inquiry into the PCC gang’s use of funds, brokerages and fintechs. And Jair Bolsonaro asked the Supreme Court to suspend his 27-year sentence.ArgentinaCountry risk rose almost 100 points in September, to about 635; above 600, Argentina stays shut out of global bond markets. Milei spent the week in Paris, where TotalEnergies set out nearly US$10 billion of oil and gas projects, and US Vice President JD Vance plans a visit in November.MexicoFactories stopped shrinking in September, with the IMEF gauge at exactly 50.0, and the deficit through August ran US$15.3 billion below plan. In the capital, social-security workers broke into their own union’s headquarters over a 2.9% raise.ColombiaA day after the surprise rate rise, the factory PMI reached 54.6, the best since October 2025, and business confidence was the highest since July 2019. Bruce Mac Master, head of the main business lobby, resigned after nearly 13 years, citing “multiple pressures”.Chile & PeruA Chilean prosecutor says Mexico’s CJNG cartel has an “active presence” in Antofagasta. Peru votes locally on Sunday; the electoral board expects official results only in November, with regional runoffs on 29 November. Police are investigating a recording in which a former Senate candidate talks of “eliminating” President Keiko Fujimori.Venezuela & EcuadorEngineers put Venezuela’s power shortfall at 3,000 megawatts, about a fifth of demand; the government publishes no grid data. Ecuador’s rationing has reached two Guayaquil container ports, and exporters say 85% of what they ship is perishable.
The big moves · two stories that travel
Brazil asked its police to investigate a reported US$1 million US grant aimed at its Supreme Court › The Guardian reported the award, titled “Countering Lawfare and Censorship in Brazil”, as one of 43 grants worth US$176.9 million; the State Department says the programmes are still in “active deliberation”. No Brazilian recipient has been named and no transfer confirmed. Jorge Messias, who heads the government's legal arm, said foreign meddling “cannot be tolerated”; Prosecutor General Paulo Gonet decides whether to open an inquiry. Filed three days before the vote, by a government whose officials already face US sanctions, the complaint is as much a political marker as a legal one. What the grant says.
Colombia was not the only central bank to raise rates on Wednesday › The Dominican Republic's also lifted its policy rate by a quarter point, to 5.50%, with August inflation at 5.13% and core at 4.76%. Two hikes on the same day, while Banxico holds at 6.50%, show that yesterday's argument about Mexico's central bank is a regional one: each bank is deciding how much of the strong dollar it is willing to import. Borrowers in pesos, in Bogotá and Santo Domingo alike, will feel it first on credit cards and loans.
Expat & living
Chile’s peso is at its weakest in over a year. What expats need to know › The central bank's official reference rate is 983.84 per dollar for today, a fourth straight weaker fixing, and the driver is the strong US dollar rather than anything decided in Santiago. If you earn in dollars, Chile got cheaper this week; if you earn in pesos and buy anything imported, it got dearer. In Guatemala, premium petrol fell to US$4.74 a gallon after the government suspended fuel taxes until 31 December. And in Jamaica, drought has hit 107 water systems, and the government is handing out 5,000 storage tanks.
Money, markets & business
Costa Rica’s foreign investment rose 23.4% to US$2.74 billion in the first half · El Salvador gets US$138 million from the IMF as growth beats forecasts · Dominican power subsidies reach US$1.47 billion in nine months
Politics & the state
Panama’s electoral tribunal rejects lawmakers’ changes to the 2029 rules · Honduras’s doctors’ strike enters a fourth week · Uruguay counts 2,723 gang members in 137 groups · A Spanish partner of Cuba’s military conglomerate starts pulling out
The wider world, from our desks
Eritrea cut ties with Ethiopia hours after Addis Ababa closed its embassy in Asmara, from our Africa desk
Also from our newsroom
We publish Africa Intelligence each morning from this same desk, and The Week every Sunday.
Today: Washington waived the rights conditions on US$320 million of Egypt’s military aid ›
That's Friday. Brazil votes on Sunday, and we will bring you the result as soon as the count allows. Reply if something here deserves a closer look — I read every one.
Matthias Camenzind
Publisher, The Rio Times
