In this week’s issue: The most important facts of the week. How the Brazilian Real behaves in election years. Which groups are voting for which candidates?


The week in review

  • Markets. Opinion polls published by Datafolha and Ibope which showed former president Lula increase his lead in the presidential race led investors into a panic. Over the week, the BRL fell almost 5% against the USD (more in the chart of the week). An even worse scenario was only avoided by a statement by the U.S. Federal Reserve, announcing a conservative approach to raise interest rates in the U.S.
  • São Paulo. João Doria, who is running for state governor, was found guilty of illegal advertisement practices during his brief tenure as mayor of São Paulo. While the court determined the suspension of his political rights for 4 years, Mr. Doria won’t be excluded from the race, as sentences in Brazil are only carried out after a verdict by a court of appeals. More on Doria
  • Labor. A court of appeals ruled that Uber drivers should be considered formal employees – with all applicable rights and
    benefits. This is Uber&#8217;s first loss at an appellate court. The company has had its business model challenged in Brazil by labor laws and fierce competition. <a href="https://brazilian.report/money/2018/07/03/uber-brazil-business-model/" target="_blank" rel="noopener noreferrer">More on Uber</a>.</li> <li><strong>Venezuela border. </strong>Tensions are high at the Brazil-Venezuela border, after a group of Brazilians attacked 700 migrants. In some parts of Roraima, Brazil&#8217;s northernmost state, migrants account for 25% of the population. Local authorities want the federal administration to fulfil its promise to take the Venezuelans to other parts of the country, and politicians are using xenophobic rhetoric to gain votes for the upcoming election.</li> <li><strong>Agriculture. </strong>A federal court has overturned a restriction on the use of glyphosate, a substance used to kill weeds and prepare land for soybean crops. In 2015, the World Health Organization considered it as &#8220;probably carcinogenic.&#8221; If the restriction had been upheld, it would cost producers about USD 24bn, and Brazil would have to import 44m metric tonnes of food in order to meet the domestic demand, said the government <em>(<a href="https://us16.admin.mailchimp.com/campaigns/preview-content-html?id=303359#opopop" target="_self" rel="noopener noreferrer">more</a> about that in the weekly cartoon)</em>.</li> </ul> <hr /> <h2>How the Brazilian Real behaves in election years</h2> <p>Every time electoral polls show a result that does not please investors, the value of the Brazilian Real drops and the stock market experiences chaos. As a consequence, many groups lose a lot of money. But, as center-left candidate Ciro Gomes put it a few weeks ago, market agents can also launch a &#8220;speculative attack&#8221; to create turbulence and force candidates to promise more austerity and back away from their original proposals.</p> <p>We have compiled data from all federal election years for the past two decades. As the BRL was only created midway through 1994, we have excluded that year&#8217;s election, as well as the previous one, in 1989.</p> <p>We can observe that the BRL&#8217;s value against the USD remained stable in years where the race had a clear favorite. But when the election was up for grabs, financial actors behaved in a hectic way.</p> <p><img class="alignnone size-full wp-image-24523" src="https://brazilian.report/wp-content/uploads/2018/08/unnamed-21.png" alt="brazilian real" width="1200" height="800" srcset="https://brazilian.report/wp-content/uploads/2018/08/unnamed-21.png 1200w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-21-300x200.png 300w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-21-768x512.png 768w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-21-1024x683.png 1024w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-21-610x407.png 610w" sizes="(max-width: 1200px) 100vw, 1200px" /></p> <hr /> <h2>Which groups are voting for which candidates?</h2> <p>The first opinion polls after the official start of the campaign are out. And they allow us to find out which segments of the society support which candidate. We have analyzed data regarding gender, income, state of residence, level of education, and age. Besides the main candidates (Lula, Jair Bolsonaro, Marina Silva, Ciro Gomes, and Geraldo Alckmin) we added a &#8220;sixth&#8221; one: spoiled votes. More from TBR: Keep up with the main polls in Brazil’s presidential race.</p> <hr /> <p><img class="alignnone size-full wp-image-24524" src="https://brazilian.report/wp-content/uploads/2018/08/unnamed-26.png" alt="" width="1096" height="452" srcset="https://brazilian.report/wp-content/uploads/2018/08/unnamed-26.png 1096w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-26-300x124.png 300w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-26-768x317.png 768w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-26-1024x422.png 1024w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-26-610x252.png 610w" sizes="(max-width: 1096px) 100vw, 1096px" /></p> <hr /> <p><img class="alignnone size-full wp-image-24525" src="https://brazilian.report/wp-content/uploads/2018/08/unnamed-22.png" alt="" width="1096" height="320" srcset="https://brazilian.report/wp-content/uploads/2018/08/unnamed-22.png 1096w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-22-300x88.png 300w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-22-768x224.png 768w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-22-1024x299.png 1024w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-22-610x178.png 610w" sizes="(max-width: 1096px) 100vw, 1096px" /></p> <hr /> <p><img class="alignnone size-full wp-image-24526" src="https://brazilian.report/wp-content/uploads/2018/08/unnamed-23.png" alt="" width="1096" height="452" srcset="https://brazilian.report/wp-content/uploads/2018/08/unnamed-23.png 1096w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-23-300x124.png 300w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-23-768x317.png 768w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-23-1024x422.png 1024w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-23-610x252.png 610w" sizes="(max-width: 1096px) 100vw, 1096px" /></p> <hr /> <p><img class="alignnone size-full wp-image-24527" src="https://brazilian.report/wp-content/uploads/2018/08/unnamed-25.png" alt="" width="1096" height="408" srcset="https://brazilian.report/wp-content/uploads/2018/08/unnamed-25.png 1096w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-25-300x112.png 300w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-25-768x286.png 768w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-25-1024x381.png 1024w, https://brazilian.report/wp-content/uploads/2018/08/unnamed-25-610x227.png 610w" sizes="(max-width: 1096px) 100vw, 1096px" /><img class="alignnone size-large wp-image-14097" src="http://brazilian.report/wp-content/uploads/2019/02/de1961bc-93db-415e-9b31-f9bdaab467f9-1024x422.png" alt="" width="1024" height="422" /></p> <p>

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BY Gustavo Ribeiro

Gustavo is the founder of The Brazilian Report, and is an award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.