Brazil’s 10-year government bond yield climbed above 14.15% in October, pressured by a global bond selloff in the run-up to the first round of the presidential election. Renewed weakness in US Treasuries triggered a broader rout across sovereign debt markets, while higher oil prices intensified inflation worries and strengthened expectations of further interest-rate hikes by major central banks, keeping government bonds under pressure worldwide.
Domestically, the final round of presidential election polls and a key debate in the days before the first vote will close out the campaign. Recent surveys continue to signal a closely contested race.
On the macroeconomic front, Brazil’s manufacturing sector recorded its steepest deterioration in operating conditions since April 2023, according to S&P Global PMI data. Labor market indicators remain consistent with a gradual cooling of activity and expectations that GDP will be roughly flat in the third quarter of 2026, despite still solid payroll figures. This backdrop has supported expectations for continued easing of the Selic policy rate.
