Markets Partly Rebound as Flávio Bolsonaro Floats Exit-for-Amnesty Deal and Right Delays Backing

Overview

• After Friday’s rout, Brazilian assets showed a partial recovery on Monday: the dollar hovered near R$5.42, futures rates fell and the Ibovespa closed up 0.52%, though losses from the 4.31% plunge remain only partly reversed.
• Flávio Bolsonaro said he has a “price” to quit the 2026 race—an amnesty vote for January 8 defendants that could benefit Jair Bolsonaro—then later told Folha his candidacy is “irreversible.”
• A meeting Flávio called with key Centrão leaders did not happen due to absences and was rescheduled, as parties signaled caution even as PL chief Valdemar Costa Neto affirmed Flávio as the party’s pick.
• São Paulo governor Tarcísio de Freitas pledged support to Flávio out of loyalty to Jair Bolsonaro but said it is too early to define the right’s strategy and that more than one opposition candidacy is likely.
• With Copom and the Fed deciding on Wednesday, markets expect the Selic to stay at 15% and a 0.25‑point Fed cut, while Finance Minister Fernando Haddad said the House aims to vote the ‘devedor contumaz’ bill Tuesday and the tax‑reform PLP 108 on Wednesday, pushing also for a benefits‑cut bill this week.