Citi recommends increasing exposure to Brazilian risk assets after Bolsonaro's stronger-than-expected performance in the first round of voting.

Citigroup advised investors to increase bullish bets on Brazilian stocks and local-currency bonds after Bolsonaro performed stronger than expected in the first round of the presidential election. "Bolsonaro is the more market-friendly candidate, promising fiscal austerity, privatizations, deregulation, and a value-added tax cut," Citigroup strategists wrote in a report. Citigroup said prediction market pricing shows a high probability that Bolsonaro will win the October 25 runoff, and it recommends buying Brazilian stocks as well as government bonds maturing in 2031, known as NTN-Fs.