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Brazil Traders Brace for Jan. 6-Style Turmoil Tied to Election

  • Bolsonaro’s rhetoric fueling fears of insurrection after vote
  • Local assets don’t price in that risk yet, say top investors
Jair Bolsonaro in Sao Paulo on Aug. 28.
Jair Bolsonaro in Sao Paulo on Aug. 28.Photographer: Jonne Roriz/Bloomberg
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It certainly isn’t likely. It definitely isn’t the base-case scenario. Oddsmakers would call it a long shot at best.

And yet, a growing number of Brazilian traders have started to position themselves for the possibility of turmoil following next month’s presidential vote. The concern, born partly out of the Jan. 6 riots in the US, is that President Jair Bolsonaro and his backers might reject results that show him losing by a small margin and try to use violence to keep him in power.