Macro Bites – Brazil Stocks Plunge After Lula Wins Presidential Runoff

China's Ministry of Industry and Information Technology (MIIT) has issued a series of major policy statements and frameworks outlining the next phase of industrial modernization, focusing on deep AI integration, next-generation smart manufacturing, and strict domestic supply chains. Guided by the strategic push for "New Quality Productive Forces," these directives shift China’s industrial footprint from basic digitization toward heavily automated, AI-driven architectures.

Incumbent left-wing President Luiz Inácio Lula da Silva has won the 2026 Brazilian presidential election, securing an unprecedented fourth term in power. In a historic runoff election held on 10/25, Lula pulled off a dramatic comeback by defeating his far-right opponent, Senator Flávio Bolsonaro, after initially trailing him in the first round of voting. According to the official results certified by the Superior Electoral Court, Lula garnered 51.79% of the valid votes compared to Bolsonaro's 48.21%. Brazilian stocks are suffering a historic selloff today, with the iShares MSCI Brazil ETF (EWZ) falling as much as 25% in early morning trading, putting it on track for its worst single-day drop on record as investors rapidly unwind bullish bets positioned for a market-friendly Flávio Bolsonaro win.

As spot gold traded to a low of $3,986.50 (lowest since 7/20) this past week, gold buying picked up in India as lower prices during the major Dussehra festival boosted purchases and lifted premiums.  Indians celebrated Dussehra last week, one of the country’s biggest gold-buying festivals. Dealers quoted premiums of up to $9/oz over official domestic prices this week, inclusive of 15% import and 3% sales levies, compared with a premium of up to $7/oz last week.

The International Lead and Zinc Study Group released updated global market balance data for Aug'26, highlighting a tightening zinc market alongside its broader ‘26–‘27 forecasts.  The global refined zinc market recorded a 3.9kt deficit during the month of August (versus a July surplus of 27.5kt) reducing the global refined zinc cumulative surplus down to 96kt during the first eight months of ’26 (compared to a 133kt surplus during the same period in ’25). 

Indonesia is moving from flooding the nickel market to managing it.  Jakarta has capped ‘26 nickel ore output roughly 30% below the ‘25 approved quota, and now the Chinese-backed producers that built the glut are weighing coordinated cuts.  Nickel has rallied ~7% in four sessions on the news.

U. of Mich. Consumer Sentiment index ticked down 10bps to 48, the 2^nd lowest reading on record after the all-time low of 44.8 set in May, "Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict.”

Week ahead: FOMC rate decision Wednesday @ 2pm (fed funds futures price just a 9.4% probability of an Oct. rate hike but a 79.2% probability of a Dec. hike).  PCE Thursday (est. +0.5% m/m and +3.6% y/y).  Earnings this week from companies composing 45% of S&P 500 market cap (GOOGL & MSFT after close Wednesday and AMZN after close Thursday).