BRAZIL: Lula Confirms Run For Fourth Term In 2026
Speaking in Jakarta, Indonesia, President Luiz Inacio Lula da Silva has said that he intends to run for a fourth term as president. Speaking to his Indonesian counterpart, Prabowo Subianto, Lula said, “I’m going to run for a fourth term in Brazil. I’m telling you this because we’ll be meeting many more times. This term only ends in 2026, at the end of the year, but I’m ready to run in other elections...”
- The confirmation has been widely expected, with Lula indicating that he would look for a fourth four-year term as long as his health remains robust enough. Brazil limits its presidents to two consecutive terms, but not for life. After the terms of Dilma Rousseff/Michel Temer, and Jair Bolsonaro, Lula is free to run for another term in 2026.
- With former President Bolsonaro barred from running and no clear successor on the right, Lula stands in good standing to win should he contest the 2026 election.
- Bloomberg News reports "Lula’s popularity has been on the rise since his tough response to US tariffs on Brazilian goods [...] He’s also intensified his rich-versus-poor rhetoric, arguing that the wealthiest Brazilians, as well as fintechs and betting companies, should pay more taxes."
- The 79-year-old's health remains something of a concern, having undergone emergency surgery in December 2024 for a bleed on the brain following a fall in October.
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US TSYS: Early SOFR/Treasury Option Roundup: Mixed Ahead Fed Chairman Powell
Mixed SOFR/Treasury options overnight on light volumes as accounts ply the sidelines ahead of today's Fed speak that includes Chairman Powell's economic outlook w/ moderated Q&A at 1235ET. Projected rate cut pricing very near late Monday levels (*): Oct'25 at -22.9bp (-22.3bp), Dec'25 at -42.9bp (-43.1bp), Jan'26 at -53.9bp (-54.1bp), Mar'26 at -66.1bp (-66bp). Note, Monday's large TYZ5 call buy: over +162k raised open interest by 116k to 164,375.
- SOFR Options:
- 5,000 SFRZ5 96.00 puts, 1.0 ref 96.325
- 4,500 SFRZ5 96.50 calls, 3.0 ref 96.32
- 2,000 SFRZ5 96.25 puts, 6.0 last
- 1,000 SFRZ5 95.93/96.06/96.18 put flys ref 96.325
- +2,000 SFRZ5 96.25 puts, 6.0
- Treasury Options:
- 2,400 TYV5 112/112.25 put spds ref 112-25
- 2,000 TYX5 113 calls vs. TYZ5 113/114 call spds, 14 net/Dec bought over
- 3,000 TYV 113/113.5 call spds 7 vs. 112-29.5/0.08%
- 1,000 TUV5 104.25 puts, 2.5 ref 104-08.5
- +1,300 TYX5 111 puts, 8
SONIA OPTIONS: SFIH6 Call Spread
SFIH6 96.45/96.55 call spread, bought for 2 in 8k.
EGB SYNDICATION: Portugal dual tranche syndication: Books Closed
"*Issue Size of Portugal's June 2054 Bond Tap Is EUR1.5B" DJ
- In line with MNI's E1-2bln expected range.
"*Issue Size of Portugal's New October 2033 Bond Is EUR3.5B" DJ
- Slightly above MNI's E3bln expectation.
Book sizes:
"*Books for Portugal's June 2054 Bond Tap Closed in Excess of EUR35B" DJ
*Books for Portugal's New October 2033 Bond Closed in Excess of EUR46B" DJ
