Brazil’s 10-year government bond yield fell to about 12.68% in October, hitting a two-year low amid a rally in domestic assets fueled by the evolving election outlook. The first voting-intention surveys published after the initial round confirmed Senator Flávio Bolsonaro’s lead over President Lula ahead of the October 25th runoff, though some results still fell within the margin of error. Markets regard Bolsonaro as comparatively more fiscally conservative, and his advantage reinforced expectations that a future administration under his leadership would tighten control over public spending and adopt measures to strengthen Brazil’s fiscal position. Reduced pressure on public finances could lower the risk premium required by investors, while stricter fiscal policy might help ease inflationary pressures, potentially enabling the Central Bank of Brazil to cut interest rates at a faster pace.