Bank of America says foreign investors undeterred by Lula's possible re‑election

Bank of America Brazil chief economist David Beker told clients that foreign investors “are not afraid of Lula.” He said the recent slowdown in capital inflows to Brazil is driven more by global dynamics – expectations of higher U.S. interest rates, a shift toward artificial‑intelligence investments and a cooling of Middle‑East tensions that pushed oil prices down – than by domestic politics.

Beker noted that foreign money was the main driver of the Ibovespa rally that lifted the index to a record 195,000 points in April, but the benchmark has since slipped to around 172,000 points as foreign holdings receded across assets. He warned that there are no clear triggers for a market rebound and that local fund managers are facing investor redemptions. Only a larger‑than‑expected drop in interest rates could change the outlook.