Lula Thwarted: Electoral Implications

  • The unanimous appeals ruling against Lula means that the market’s top electoral concern has been allayed, favouring bulls despite reform gridlock. 
  • The ruling does not bar Lula from registering for the presidential race, but it does significantly raise the odds that he will be found ineligible to run. 
  • Lula’s expected removal from the race will help less-polarizing candidates; the biggest risk to monitor ahead is the fragmentation of the centrist vote. 
  • Public reaction to the verdict was relatively muted, underscoring the former leader’s fall from grace in the wake of the corruption investigations and despite his current presidential frontrunner status. 

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