Brazil’s 10-year government bond yield fell to 14.45% from a near one-month high of 14.90% reached on August 14, following the release of the Genial/Quaest poll on the 2026 presidential election. The poll showed President Lula and Senator Flavio Bolsonaro in a technical tie in a potential October runoff, with Lula receiving 42% of voting intentions versus 41% for Bolsonaro. Markets view Bolsonaro as more fiscally restrictive, while elevated domestic yields and weak business activity continue to weigh on the economic outlook. Meanwhile, Brazil’s GDP expanded 0.5% in the second quarter of 2026, slightly above forecasts, driven mainly by agriculture. However, the detailed breakdown was weaker, suggesting economic momentum is fading despite a tight labor market and short-term demand stimulus measures. For the BCB, the data suggest that the effects of monetary tightening are increasingly visible, potentially leaving room for further Selic cuts.