Brazil Bolsonaro Pushes for Constitutional Change

That matters because Brazil’s constitution is hard to change. Reforms must pass both chambers twice and clear a three-fifths threshold in each house, meaning 49 senators and 308 deputies. Flávio’s camp is betting that backing from the Progressive Party and União Brasil, both of which hold ministries in President Luiz Inácio Lula da Silva’s government, could widen that base further if he wins the presidency.

The immediate market implication is not just policy risk but institutional risk. Flávio and his allies have also campaigned against judges at the Supreme Federal Court, and campaign coordinator Rogério Marinho signaled the Senate would not be “omissive” toward the court, while proposing a rule change that would lower the bar for opening impeachment proceedings against justices from 54 votes to 49.

Brazilian assets have already been on alert. The EWZ Brazil ETF closed at $42.37 on Oct. 7, above both its 50-day and 200-day moving averages, after a steep run that left its RSI at 71.7, a level that typically indicates an overbought market. The leveraged BRZU fund ended the same day at $128.75, also above both moving averages, with RSI at 71.6, underscoring how much political optimism is already priced into Brazilian equities.

For investors, the narrative now is whether a Bolsonaro presidency would translate into a durable pro-market reform push or a confrontation with Brazil’s institutions that could unsettle the currency, bonds and bank and utility stocks exposed to regulatory noise. The next catalyst is the runoff campaign, along with the shape of any post-election congressional coalition and early moves on Supreme Court oversight and constitutional reform.