Brazilian assets surged, with the real soaring as much as 5%, while the stock market posted its biggest single-day gain in six years.

Bolsonaro's better-than-expected election performance drove a sharp rally in Brazilian stocks and the currency. Brazilian assets surged after Senator Bolsonaro unexpectedly took the lead over incumbent President Lula in the first round of Brazil's presidential election, with the real jumping as much as 5% and the stock market posting its biggest one-day gain in six years. Citigroup advised investors to add bullish bets on Brazilian stocks and local-currency bonds after Flavio Bolsonaro's stronger-than-expected showing in the first round of the presidential election. "Bolsonaro is the more market-friendly candidate, pledging fiscal austerity, privatization, deregulation and a cut in value-added tax," Citigroup strategists wrote in a report. "The strong performance of his party in the Senate should help push his legislative agenda through," they added. 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.