2026 is not only a busy year for soccer, but also a particularly important year politically.Especially in emerging economies, there were already quite a few elections on the calendar, including presidential elections in Hungary and Colombia, among others, which led to significant shifts in policy.
In Hungary, the victory of the pro-European Péter Magyar—and especially the defeat of Viktor Orbán—was enthusiastically welcomed by investors. In Colombia, too, financial markets reacted positively after the more market-friendly candidate De La Espriella narrowly won the election, succeeding the far-left President Gustavo Petro. The impact on the markets was immediate: since the start of the year, the Hungarian and Colombian stock markets have risen by 35% and 30%, respectively (in euros). Local government bonds from both countries are also among the best-performing emerging-market bonds maturing in 2026.
In October, attention will shift to Brazil, where a sort of rematch of the 2022 election is on the agenda. Incumbent President Lula, who previously served from 2003 to 2011, will face off against Flavio Bolsonaro, the son of former (and controversial) President Jair Bolsonaro.
Right now, Brazilians are mainly captivated by the Seleção, the national soccer team that is chasing its sixth World Cup title. But in early October, something that is at least as important may be at stake. The left-wing populist Lula will then face off against the right-wing populist Flavio Bolsonaro, who is taking over the candidacy from his father, Jair Bolsonaro. Jair Bolsonaro is under house arrest due to his alleged involvement in an attempted coup following his election defeat in 2022.
Investors are closely following the campaign. Their attention is focused primarily on the budget plans andboth candidates’ views on the rapidly rising public debt. After all, there are genuine concerns about this in the long term.
Last year, Lula still seemed to be heading toward a comfortable lead, but early this year, Bolsonaro gained ground in the polls. By spring, the race appeared to be wide open.However, that momentum took a hit when Banco Master went bankrupt following a large-scale fraud case. Leaked audio messages revealed in May that the bank’s owner had been in contact with Flavio Bolsonaro regarding the financing of a film about his father. Although Bolsonaro himself was not directly involved, the scandal reflected negatively on him. Corruption remains a sensitive issue in Brazil and is among voters’ top concerns. The damage to Bolsonaro appears limited for now, but the scandal does complicate his efforts to garner broader political support. Meanwhile, Lula is trying to strengthen his position with popular measures, such as a discount on diesel and favorable credit terms for taxi drivers.
Still, the race remains particularly close.Despite his advantages, Lula has so far been unable to build a decisive lead, meaning the election race could still go either way in the coming months.
Lula vs. Bolsonaro
For now, Lula appears to be in the lead by a narrow margin,but just like in the World Cup, a match isn’t decided until the final whistle blows. For investors, the question also arises as to what difference the eventual winner will actually make. In theory, Flavio Bolsonaro is considered the more market-friendly candidate. Moreover, he maintains good relations with U.S. President Donald Trump, which could be an asset in a world where trade tariffs are regaining importance.
Still, history shows that attractive returns could be achieved on Brazilian stocks and bonds even under Lula. Ultimately, much will depend on the course both candidates chart in the coming months, the economic plans they put forward, and the teams they surround themselves with. Just as with the Seleção, it won’t be just the star player who makes the difference, but also the tactics and the quality of the team around him.
