Following the socialist "Workers Party" loss last night in the Brazilian Presidential elections, markets are rejoicing (for now) with stocks and the currency strengthening on hopes of far-right winner Bolsonaro's confidence-inspiring hope for the beleaguered economy.

The Real surged to its highest since early May (though is fading off the day's highs)...

 

And the Brazil ETF is trading up around 5% in the pre-market (Ibovespa futures up around 4%)...

Win Thin, a strategist at BBH, said that while there may be some knee-jerk buying today, markets may be getting too excited with Bolsonaro's win:

"I think he too comes with a lot of baggage that markets are overlooking."

We will see if these gains hold.